ADT’s Q1 Earnings Report Beats Analysts’ Predictions

The nation’s largest security provider posted revenue of $887 million for the first quarter of 2015, compared to analysts predictions of $833 million.

BOCA RATON, Fla. – ADT has reported better than expected fiscal first quarter earnings after the electronic security firm posted adjusted earnings of 51 cents per share for the quarter, beating analysts’ estimates of 49 cents per share, The Legacy reports.

The company reported revenue of $887 million for the quarter, compared to the analysts’ predictions of $883 million. Recurring revenues of $825 million, which accounted for 93% of total revenue in the reported quarter, was up 6.5% compared with the year-earlier period.

Despite its growing revenue, analyst firm TheStreet stated that the company underperformed as compared with the industry average of 8.4%. 

Analysts at Raymond James set an “outperform” rating and a $33.82 price target on the stock, while analysts at Morgan Stanley downgraded shares of ADT Corp from an “equal weight” rating to an “underweight” rating and set a $34 price target on the stock in a research note.

ADT’s revenues slightly increased by 4.4% since the same quarter a year ago, TheStreet reports, noting that the growth in revenue appears to have trickled down to the company’s bottom line, improving the earnings per share.

The electronic security firm reported double-digit gross subscriber growth, while attrition reached its lowest levels since its inception as a public company over two years ago.

ADT added more than 130,000 Pulse customers in the quarter and upgraded more than 31,000 existing customers to its Pulse platform to account for around 18% of the total customer base, according to NASDAQ. Gross customer additions in the quarter were 262,000, which represented a year-over-year increase of 13.4%.

During the quarter, ADT aimed to reduce customer attrition by initiating tighter credit screening policies, implementing resale efforts and customer loyalty programs. Revenue attrition improved 120 basis points to 13% year over year, while unit attrition in residential and small business channels was up 70 basis points to 12.9% due to a stable housing market, strong resale efforts and robust customer loyalty programs.

The firm also implemented new technology and installation procedures and optimized lead management, sales conversion and marketing activities across all channels in an effort to reduce subscriber acquisition costs.

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