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Why Is Trimble (TRMB) Up 9.7% Since Last Earnings Report?
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It has been about a month since the last earnings report for Trimble Navigation (TRMB - Free Report) . Shares have added about 9.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Trimble due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Trimble delivered non-GAAP earnings of 62 cents per share in second-quarter 2024, surpassing the Zacks Consensus Estimate by 8.77% but declining 3.1% on a year-over-year basis.
Revenues of $870.8 million beat the Zacks Consensus Estimate by 1.16% but declined 12.4% year over year (1% up on an organic basis).
Product revenues (contributed 36.8% to total revenues) totaled $320.4 million, down 34.7% on a year-over-year basis. Subscription and services revenues (63.2% of total revenues) increased 9.4% year over year to $550.4 million.
TRMB generated annualized recurring revenues of $2.11 billion, which increased 12% on a year-over-year basis (up 14% on an organic basis).
Quarter Details
AECO revenues (34.4% of total revenues) were $299.7 million, up 13.5% year over year.
The AECO (Architecture, Engineering, Construction, and Owners) segment delivered 18% growth in ARR, driven by a successful integration of products and innovative solutions like Trimble Unity and Trimble Connect. The SketchUp product surpassed 1 million subscribers, showcasing strong customer engagement.
Field Systems revenues (43.6% of total revenues) of $379.3 million fell 29.8% year over year. Despite a decline in revenues due to strong prior-year government-related sales, the segment registered 17% ARR growth. Key developments included strong performance in civil construction and automotive markets, along with new product launches.
T&L revenues (22% of total revenues) of $191.8 million surged 1.5% year over year. The segment exceeded top and bottom-line expectations with double-digit ARR growth from Transporeon and maps business. The new Instinct platform and video solutions contributed well.
In second-quarter 2024, the non-GAAP gross margin came in at 66.5%, expanding 220 basis points (bps) year over year.
On a non-GAAP basis, operating expenses accounted for 44.1% of revenues, up 320 bps year over year.
Non-GAAP operating margin came in at 22.3%, which contracted 90 bps year over year.
Balance Sheet
At the end of second-quarter 2024, cash and cash equivalents were $944.1 million, up from $255.1 million at the end of first-quarter 2024.
Total debt was $1.79 billion at the end of the second quarter compared with $3.03 billion at the first-quarter end.
Guidance
For third-quarter 2024, Trimble expects revenues in the range of $840-$880 million.
The company expects non-GAAP earnings to be between 58 cents and 64 cents per share.
For 2024, Trimble expects revenues to be between $3.59 billion and $3.67 billion. The company expects 2024 non-GAAP earnings to be between $2.67 and $2.81 per share.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
VGM Scores
At this time, Trimble has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Trimble has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Trimble is part of the Zacks Electronics - Miscellaneous Products industry. Over the past month, KLA (KLAC - Free Report) , a stock from the same industry, has gained 6.8%. The company reported its results for the quarter ended June 2024 more than a month ago.
KLA reported revenues of $2.57 billion in the last reported quarter, representing a year-over-year change of +9.1%. EPS of $6.60 for the same period compares with $5.40 a year ago.
KLA is expected to post earnings of $7.02 per share for the current quarter, representing a year-over-year change of +22.3%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for KLA. Also, the stock has a VGM Score of C.
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Why Is Trimble (TRMB) Up 9.7% Since Last Earnings Report?
It has been about a month since the last earnings report for Trimble Navigation (TRMB - Free Report) . Shares have added about 9.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Trimble due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Trimble (TRMB - Free Report) Q2 Earnings Beat Estimates, Revenues Down Y/Y
Trimble delivered non-GAAP earnings of 62 cents per share in second-quarter 2024, surpassing the Zacks Consensus Estimate by 8.77% but declining 3.1% on a year-over-year basis.
Revenues of $870.8 million beat the Zacks Consensus Estimate by 1.16% but declined 12.4% year over year (1% up on an organic basis).
Product revenues (contributed 36.8% to total revenues) totaled $320.4 million, down 34.7% on a year-over-year basis. Subscription and services revenues (63.2% of total revenues) increased 9.4% year over year to $550.4 million.
TRMB generated annualized recurring revenues of $2.11 billion, which increased 12% on a year-over-year basis (up 14% on an organic basis).
Quarter Details
AECO revenues (34.4% of total revenues) were $299.7 million, up 13.5% year over year.
The AECO (Architecture, Engineering, Construction, and Owners) segment delivered 18% growth in ARR, driven by a successful integration of products and innovative solutions like Trimble Unity and Trimble Connect. The SketchUp product surpassed 1 million subscribers, showcasing strong customer engagement.
Field Systems revenues (43.6% of total revenues) of $379.3 million fell 29.8% year over year. Despite a decline in revenues due to strong prior-year government-related sales, the segment registered 17% ARR growth. Key developments included strong performance in civil construction and automotive markets, along with new product launches.
T&L revenues (22% of total revenues) of $191.8 million surged 1.5% year over year. The segment exceeded top and bottom-line expectations with double-digit ARR growth from Transporeon and maps business. The new Instinct platform and video solutions contributed well.
In second-quarter 2024, the non-GAAP gross margin came in at 66.5%, expanding 220 basis points (bps) year over year.
On a non-GAAP basis, operating expenses accounted for 44.1% of revenues, up 320 bps year over year.
Non-GAAP operating margin came in at 22.3%, which contracted 90 bps year over year.
Balance Sheet
At the end of second-quarter 2024, cash and cash equivalents were $944.1 million, up from $255.1 million at the end of first-quarter 2024.
Total debt was $1.79 billion at the end of the second quarter compared with $3.03 billion at the first-quarter end.
Guidance
For third-quarter 2024, Trimble expects revenues in the range of $840-$880 million.
The company expects non-GAAP earnings to be between 58 cents and 64 cents per share.
For 2024, Trimble expects revenues to be between $3.59 billion and $3.67 billion. The company expects 2024 non-GAAP earnings to be between $2.67 and $2.81 per share.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
VGM Scores
At this time, Trimble has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Trimble has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Trimble is part of the Zacks Electronics - Miscellaneous Products industry. Over the past month, KLA (KLAC - Free Report) , a stock from the same industry, has gained 6.8%. The company reported its results for the quarter ended June 2024 more than a month ago.
KLA reported revenues of $2.57 billion in the last reported quarter, representing a year-over-year change of +9.1%. EPS of $6.60 for the same period compares with $5.40 a year ago.
KLA is expected to post earnings of $7.02 per share for the current quarter, representing a year-over-year change of +22.3%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for KLA. Also, the stock has a VGM Score of C.