Sierra Wireless Q4 2007 Earnings

By: ispeculatornew
Date posted: 02.09.2008 (4:12 pm) | Write a Comment  (2 Comments)

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SWIR – Sierra Wireless (Nasdaq) – (Closing Price on Friday 2/8/08 – $15.92)

Sierra Wireless announced its fourth quarter earnings on January 31 and reported very impressive results.

Sierra Wireless reported revenue of 135.6 million which was a sequentially increase of 22% and a year over year increase of 99%. Sierra Wireless reported diluted EPS of 0.37. This was up moderately from the previous quarter’s result of 0.35 and up significantly from 0.12 last year. For next quarter Sierra Wireless gave guidance for revenue of 136 million and EPS of 0.30.

In the conference call the CEO mentioned he expects continued revenue growth, improved earnings, and business diversification in 2008. He stated that revenue in Q1 will be constrained by component supply limitations but this should clear up by Q2. He also mentioned that the introduction of Gobi and Erickson has increased competition in the embedded module segment but he expects growth in that segment this year.

The stock price of Sierra Wireless briefly traded above seventeen dollars the day after earnings but has sold off since. Investors are selling off stocks indiscriminately and tech stocks and small caps in particular have been getting hit hard. Unfortunately this is depressing the stock price of Sierra Wireless. Over the long term the stock price of any stock will ultimately follow the improvement or deterioration of a company’s fundamentals. Since the fundamentals for Sierra Wireless continue to improve I would continue to hold or accumulate more shares.

Disclaimer: I have no position in SWIR.

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