The Q1 2015 earnings report for automotive, audio and consumer accessory distributor VOXX International Corp (NASDAQ: VOXX), a potential peer or performance benchmark of Harman International Industries Inc (NYSE: HAR), Skullcandy Inc (NASDAQ: SKUL) and Turtle Beach Corp (NASDAQ: HEAR), is due out after the market closes on Thursday. Aside from the VOXX International Corp earnings report, it should be said that Harman International Industries Inc reported Q3 2014 earnings on May 1st (they beat expectations and raised their forecast on strong European automotive demand) and will report Q4 2014 earnings on August 7th; Skullcandy Inc reported Q1 2014 earnings on May 1st and will report Q2 2014 near the end of this month; and Turtle Beach Corp reported Q1 2014 earnings on May 12th. However, VOXX International Corp's last earnings report was a train wreck that led to several analyst downgrades.
What Should You Watch Out for With the VOXX International Corp Earnings Report?First, here is a quick recap of VOXX International Corp's recent earnings history from Yahoo! Finance:
| EPS Est | 0.04 | 0.09 | 0.50 | 0.24 |
| EPS Actual | 0.09 | 0.20 | 0.63 | 0.35 |
| Difference | 0.05 | 0.11 | 0.13 | 0.11 |
| Surprise % | 125.00% | 122.20% | 26.00% | 45.80% |
Back in mid-May, VOXX International Corp reported that net sales for the Fiscal 2014 year ended February 28, 2014 fell 3.1% to $809.7 million as automotive sales fell 1% to $412.5 million, premium audio sales fell 2.0% to $189.2 million and consumer accessories sales fell 8.2% to $206.3 million. Gross margin increased 10 basis points to 28.4% and a a net loss of $26.6 million (including impairment charges) or net income of $31.0 million excluding impairment charges verses net income of $22.5 million for the comparable period last year. An impairment charge of $32.2 million was recorded for goodwill on the most recent acquisitions of Hirschmann, Invision and Klipsch plus an impairment charge of $22.8 million was taken on indefinite lived trademarks of various brands and units plus an impairment charge of $2.6 million was recorded on the Technuity business which was restructured. The CEO commented:
"Through the first nine months of the year, we were tracking in line with our plan and had very strong load-in's for the holiday season. While we lowered our top-line guidance based on softness in December, severe weather conditions throughout the country impacted the entire retail industry and had a big effect on our fourth quarter performance. Retail was the primary reason for our miss and our story has not changed. New products coming to market, our growing OEM platform, sales from new and exciting biometrics, imagery and action cameras, and our expanding retail distribution are the drivers for our optimism. I believe we are well positioned to drive meaningful growth over the next few years and deliver long-term sustainable value for our shareholders."
And:
"We took steps in Fiscal '14 to protect margins in certain categories and believe we're well positioned to post modest growth in Fiscal '15, with upside should some of the bigger projects we're pursuing materialize and if the retail environment improves in the next holiday season. We have accounted for softness in our guidance based on sell-through over the past few years and are managing our overhead accordingly. We will continue to invest in new growth categories and pursue sponsorships and promotions we believe will increase brand awareness and drive sales. We have also increased our engineering staff by approximately 10 percent to support new OEM and various programs that will be beginning towards the end of FY15 and run for several years. We are investing not for the quarter or year, but for our long-term future."
Nevertheless, the above results led to several analyst downgrades which hit shares along with some lawsuits filed by so-called shareholder rights law firms.
This time around and according to the Yahoo! Finance analyst estimates page, the consensus expects revenue of $190.27 million and EPS of $0.06 - down from EPS of $0.11 expected sixty days.
On the news front and just after earnings, VOXX International Corp announced a $3 million strategic investment in EyeLock, a market leader in iris-based identity authentication solutions. VOXX International Corp already has a strategic partnership with EyeLock to distribute myris, its newest solution that's the world's first USB-enabled iris identity authenticator offering a convenient and secure way to authenticate an individual's identity.
What do the VOXX International Corp Charts Say?The latest technical chart for VOXX International Corp shows shares have been heading downward since the beginning of December:
A performance chart shows that VOXX International Corp has exactly been giving investors amplified returns like Harman International Industries Inc and Turtle Beach Corp while Skullcandy Inc has investors singing the blues:
A technical chart for Harman International Industries Inc shows a flat performance since March while Skullcandy Inc has been trending downward since then and Turtle Beach Corp has been bouncing further downward since late last year:
Given the last earnings report, VOXX International Corp needs to do something to show that things are turning around as blaming the weather will probably not work a second time around. Otherwise, its hard to get excited about the stock unless you buy into the CEO's long term view.
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