Why Trimble Navigation (TRMB) Stock Is Down Today

NEW YORK (TheStreet) -- Trimble Navigation  (TRMB) plunged Wednesday after the GPS maker reported first-quarter results that came up short of analysts' expectations.

Net income increased year over year to $68.6 million, or 26 cents a share, from $49.8 million, or 19 cents a share. The company earned 39 cents a share, excluding items. Revenue increased 8.7% year over year to $604.7 million, which was short of the company's forecast of $610 million to $630 million.

Analysts expected Trimble to earn 42 cents a share on revenue of $618.2 million, according to Thomson Reuters I/B/E/S.

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The company also issued second-quarter guidance for adjusted profit of 38 cents a share to 42 cents a share and revenue of $605 million to $630 million. Analysts expected adjusted profit of 45 cents a share on revenue of $645.8 million.

The stock was down 15.22% to $32.36 at 11:45 a.m.

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Separately, TheStreet Ratings team rates TRIMBLE NAVIGATION LTD as a "buy" with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate TRIMBLE NAVIGATION LTD (TRMB) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, increase in net income, expanding profit margins and good cash flow from operations. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • TRMB's revenue growth has slightly outpaced the industry average of 7.0%. Since the same quarter one year prior, revenues rose by 16.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • TRIMBLE NAVIGATION LTD reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, TRIMBLE NAVIGATION LTD increased its bottom line by earning $0.84 versus $0.75 in the prior year. This year, the market expects an improvement in earnings ($1.74 versus $0.84).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Electronic Equipment, Instruments & Components industry. The net income increased by 80.8% when compared to the same quarter one year prior, rising from $33.19 million to $60.00 million.
  • The gross profit margin for TRIMBLE NAVIGATION LTD is rather high; currently it is at 58.04%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 10.01% is above that of the industry average.
  • Net operating cash flow has increased to $136.23 million or 40.72% when compared to the same quarter last year. Despite an increase in cash flow, TRIMBLE NAVIGATION LTD's cash flow growth rate is still lower than the industry average growth rate of 63.65%.
  • You can view the full analysis from the report here: TRMB Ratings Report

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Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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