TASER International Inc. (TASR) continued its earnings momentum in the fourth quarter of 2013. It reported earnings of 13 cents per share during the quarter, an 85.7% improvement from 7 cents earned in the year-ago period. The reported figure even surpassed the Zacks Consensus Estimate easily by 160%. The upsurge was driven by higher sales.
Full year 2013 earnings were 37 cents per share, beating the Zacks Consensus Estimate by 6 cents and the year-ago number by 10 cents.
Highlights of the Quarter
In the fourth quarter, the company booked record revenues of $40.0 million, beating the Zacks Consensus Estimate by $3 million. The reported number also increased 24.6% from $32.1 million in the fourth quarter 2012. The solid results were attributable to the upgrades done by numerous law enforcement agencies to the new TASER X26P and TASER X2 Smart Weapons.
Full year 2013 revenues surged 20.1% year over year to $137.8 million, beating the Zacks Consensus Estimate of $135.0 million.
The company’s gross margin expanded 410 basis points year over year to 63.8% in the quarter, driven by higher sales leveraging better overhead expenses. The company also benefited from the capitalized EVIDENCE.com software development costs being fully depreciated midway through 2013.
Sales, general and administrative expenses fell 6.3% year over year to $11.7 million in the fourth quarter of 2013.
Quarterly Segmental Details
TASER Weapons segment revenues surged 24.1% year over year to $37.6 million in the fourth quarter of 2013.
EVIDENCE.com & Video segment revenues saw a 33.6% improvement to $2.5 million in the fourth quarter of 2013. Segment bookings improved 211.5% from the year-ago level to $5.2 million in the quarter.
Financials
The company had $42.3 million of cash and cash equivalents at the end of 2013 versus $36.1 million at 2012-end.
Our Take
TASER in an earlier update on stun-gun sales revealed that it booked numerous new orders for its TASER brand conducted electrical weapons (CEWs) and its next generation Smart Weapons. The company had shipped most of the orders in the fourth quarter of 2013 with the balance to be delivered in the first quarter of 2014.
The company is seeing increasing uptake on the back of its new Smart Weapons platforms, as customers are eager to follow this market transition. The majority of these orders were for its next-generation electroshock Smart Weapons, which totaled over 5,000 from local, state and federal agencies. The company’s new Smart Weapon platforms offer significant improvements in safety, effectiveness and accountability.
Again, TASER invests considerably in upgrading existing and producing new products that make life safer in public places. During the fourth quarter 2013, research and development expenses were $3.4 million, up 73.7% year over year due to additional personnel expense associated with EVIDENCE.com & Video segment product development initiatives.
TASER International currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the sector include Alliant Techsystems Inc. (ATK), Astronics Corporation (ATRO) and BAE Systems plc (BAESY), all with a Zacks Rank #1 (Strong Buy).
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