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Shares of Sierra Wireless (NASDAQ:SWIR) jumped 25% Thursday after the company's third quarter results and forward guidance both significantly exceeded expectations.
Why it's happening
Quarterly revenue climbed 27.6% year over year to $143.3 million, driven by 29.7% growth in OEM solutions to $124.3 million, and 15.4 % growth in Enterprise solutions to $19 million. Organic revenue growth, which excludes contributions from Sierra Wireless' acquisitions of the AnyData and In Motion Technology businesses, came in at 18.8% over the same year-ago period. Meanwhile, adjusted net earnings more than doubled to $7.7 million, or $0.24 per share. Analysts, on average, were only expecting earnings of $0.13 per share on sales of $138.8 million.
For the current quarter, Sierra Wireless expects revenue of $145 million to $148 million, and earnings per share in the range of $0.25 to $0.28. The mid-point of both ranges sits well above analysts' expectations for fourth quarter revenue and earnings of $142.4 million and $0.17 per share, respectively.
Sierra Wireless CEO Jason Cohenour hailed the company's "leadership position in M2M" as helping drive company-record revenue and solid profitability. He then promised, "While executing operationally, we will continue to pursue acquisitions that help accelerate our growth and enhance our strategic position."
Steve Symington has no position in any stocks mentioned. The Motley Fool recommends Berkshire Hathaway and Sierra Wireless. The Motley Fool owns shares of Berkshire Hathaway and Sierra Wireless. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.