ADT Tops 4Q Profit Forecasts; Pulse Customers Grow to 1.5M

Quarterly net income was $81 million, down 1.2% from $82 million in the final quarter of fiscal 2014.

BOCA RATON, Fla. – ADT (NYSE: ADT) reported a 4.9% increase in revenues for its fiscal year ended Sept. 25. However, profits fell 2.6% for the year.

Annual revenue was $3.6 billion, up from $3.4 billion in fiscal 2014. The company, based here, reported net income of $296 million, or $1.72 a share, compared with $304 million, or $1.66 a share, in fiscal 2014. The per share amounts include special items.

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Revenue for fiscal 2016 will rise as much as 4.5%, ADT said Tuesday. That implies sales of as much as $3.73 billion, compared with the $3.72 billion average of analysts’ estimates compiled by Bloomberg. The current fiscal year will end Sept. 30, spanning 53 weeks as the company shifts to the new concluding date.

ADT’s 2016 outlook included a projection for “subscriber base to increase above 2015 levels,” without saying what the change might be. Fourth-quarter profit excluding some items was 51 cents a share, topping the average estimate of 48 cents.

Revenue attrition for the quarter improved to 12.2%, an improvement of 20 basis points sequentially and 130 basis points year-over-year. Unit attrition for residential and business improved 10 basis points sequentially, and 100 basis points from last year, ending at 12.2% for the quarter, as ADT closed the quarter with 6.6 million customer accounts.

In its earnings release, ADT provided key insights to some of the initiatives it has taken to accelerate growth, and optimize capital structure. In order to capture a larger share in the market, the company invested heavily in its ADT Pulse platform and launched several new products.

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Pulse customers grew to 1.5 million in the reported quarter. The company made 108,000 Pulse customer additions in the quarter and upgraded 39,000 existing customers to Pulse. Gross customer additions in the quarter were 278,000, the highest level achieved in 2015. Pulse take rates reached 59% during the quarter, while total interactive customers made up 23% of ADT’s total customer base.

During the reported quarter, the company announced a new partnership with LG Electronics to deliver a new all-in-one security product and service for the North American market.  ADT has made significant progress on its retail strategy and is expected to launch the service in the first calendar quarter of 2016. At the same time, ADT said it improved average time for repairing service by 10% compared to last year with continued investment in customer care and service personnel.

For its fourth quarter, ADT reported total revenue of $899 million, an increase of 1.8%, or 3.3% in constant currency, over the same quarter in 2014. Recurring revenue, which made up about 93 percent of total revenue in the quarter, was $835 million, up 2 percent compared with the same period last year.

Quarterly net income was $81 million, down 1.2% from $82 million in the final quarter of fiscal 2014.

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