TASER International Inc.’s (TASR) fourth-quarter earnings declined year over year due to rising cost. This Scottsdale, AZ-based company reported earnings of 9 cents per share in the fourth quarter, short of the Zacks Consensus Estimate and the prior-year earnings of 10 cents by 10%.
In 2014, earnings were reported at 37 cents per share, also lagging the Zacks Consensus Estimate of 40 cents by 7.5%. However, earnings for the year increased 8.8% from 34 cents in 2013.
Total Revenue
In the fourth quarter, the company booked revenues of $46.8 million, beating the Zacks Consensus Estimate of $42 million by 11.4%. The reported number also increased nearly 17% from the fourth quarter of 2013. The upside was attributable to higher sales of TASER X26P smart weapon, partially offset by a decline in international sales.
Revenues for 2014 shot up 19.4% year over year to $164.5 million, beating the Zacks Consensus Estimate of $160 million by 2.8%.
Highlights of the Quarter
The company’s gross margin contracted 520 basis points year over year to 58.6% in the quarter due to higher overhead expenses and accounting reserves for obsolete inventory related to the production close of the TASER X26 conducted electrical weapon (CEW) and surplus inventory for AXON camera line components.
Sales, general and administrative expenses soared 23.7% year over year to $14.4 million in the reported quarter.
Revenues from TASER’s Weapons segment increased 7.7% year over year to $40.5 million.
AXON and EVIDENCE.com revenues surged 159.4% to $6.4 million due to higher average selling prices. Segment bookings skyrocketed 371.6% to $24.6 million from the year-ago level of $5.2 million.
Financials
The company had cash and cash equivalents of $48.4 million as of Dec 31, 2014, compared with $42.3 million as of Dec 31, 2013.
Net cash from operating activities for 2014 was $35.4 million compared with $32.4 million in 2013.
Our Take
With over $24.6 million in EVIDENCE.com and AXON bookings, TASER’s order book continues to impress.
TASER invests considerably in upgrading existing and producing new products that bring increasing transparency to the police forces. During the fourth quarter 2014, research and development expenses were $4.1 million, up 18% 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 Digimarc Corp. (DMRC), Napco Security Technologies, Inc. (NSSC) and Net 1 Ueps Technologies Inc. (UEPS), all with a Zacks Rank #2 (Buy).
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