Please ensure Javascript is enabled for purposes of website accessibility

Why Sierra Wireless Stock Jumped Today

By Evan Niu, CFA – May 14, 2021 at 11:35AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Internet-of-Things (IoT) specialist reports first-quarter earnings.

What happened

Shares of Sierra Wireless (SWIR) popped as much as 11% today after the company reported first-quarter earnings. Sierra Wireless topped revenue estimates and introduced a new key performance metric.

So what

Revenue in the first quarter was $108.1 million, slightly ahead of the consensus estimate of $107.2 million in sales. That translated into an adjusted net loss of $9.6 million, or $0.26 per share, which was right on target with how much analysts expected Sierra Wireless to lose. The Internet of Things (IoT) specialist disclosed that it was the victim of a ransomware attack at the end of March that forced the company to temporarily halt production, but the disruption lasted less than a week and Sierra Wireless has since upgraded its security protocols.

A worker holds a laptop while looking at digital images of charts and graphs all around him.

Image source: Getty Images.

"We have done well managing costs despite a tight supply chain environment and we lowered our operating expenses sequentially in the first quarter," CEO Kent Thexton said in a statement. "Demand for our [IoT] products and gateways remains strong with Q1 orders up over 30% year over year, and we are working closely with all our supply chain partners to build and ship our products to our customers."

Now what

Sierra Wireless is introducing a new metric, monthly recurring revenue (MRR), that it says will help investors better understand the business. MRR consists of monthly subscription revenue and usage fees, and was $11.5 million in March. The company has also changed its reporting structure and now has two reportable segments, IoT Solutions and Enterprise Solutions.

Guidance for the second quarter calls for revenue in the range of $118 million to $122 million.

Evan Niu, CFA has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Sierra Wireless Stock Quote
Sierra Wireless
SWIR
$30.51 (%)

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
342%
 
S&P 500 Returns
110%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/06/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.