What happened
Shares of Sierra Wireless (SWIR) have gotten crushed today, down by 10% as of 11:35 a.m. EDT, after the company reported second-quarter earnings. The results beat expectations and Sierra Wireless warned of supply chain disruptions.
So what
Revenue in the second quarter was $132.8 million, ahead of the $119.7 million in sales that analysts were modeling for. The Internet of Things (IoT) segment increased sales to $90.3 million, while the enterprise solutions business generated $42.5 million in revenue. Sierra Wireless reported an adjusted net loss from continuing operations of $1.1 million, or $0.03 per share. The consensus estimate had called for $0.15 per share in adjusted losses.
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"Revenue in the Second Quarter improved year over year and sequentially, non-GAAP operating expenses remained flat with the prior quarter, and Adjusted EBITDA improved," new CEO Phil Brace commented in a release. "I look forward to bringing my operational and strategic experience to Sierra Wireless as we focus on profitable growth."
Now what
Sierra Wireless declined to provide guidance for the third quarter due to ongoing uncertainty related to the COVID-19 pandemic. More specifically, the company warned that a contract manufacturing facility in Vietnam is experiencing significant disruptions due to surging cases and vaccine shortages in that country, which is "impacting our ability to build and ship cellular embedded modules and gateways to our customers in the third quarter of 2021."
The company is attempting to ramp up production at other locations, such as a site in Mexico, but the impacts are creating considerable uncertainties. Sierra Wireless warned that the challenges are "expected to have a material negative impact" on third-quarter results.
