AUSTIN, Texas — Resideo Technologies (NYSE: REZI) on Thursday reported fourth-quarter net revenue of $1.3 billion, a 3% increase compared to the same period the prior year. For the full year, the company reported net revenue of $5 billion, up 3% year-over-year.
The company reported quarterly earnings of 39 cents per share, beating the Zacks Consensus Estimate of 28 cents per share. This compares to earnings of 31 cents per share a year ago. The figures are adjusted for non-recurring items.
According to Zacks, the Q4 report represents an earnings surprise of 39.29%. In the prior quarter, Zacks forecasted earnings per share (EPS) of 23 cents when the company actually produced earnings of 19 cents.
The company said fourth-quarter results were driven by ongoing strong execution in its ADI Global Distribution business, where global revenue trends and disciplined cost management are driving adjusted EBITDA growth and profit margin expansion.
ADI’s revenue increased by 10%, which the company attributed primarily to security and video surveillance product lines. Segment adjusted EBITDA increased year-over-year by 18% as SG&A costs grew at a lower rate than revenue.
Revenue from the Products & Solutions unit decreased by 4% year-over-year, driven by declines in the Comfort and Residential Thermal Solutions (RTS) businesses. Segment adjusted EBITDA for the fourth quarter decreased year-over-year by 28%, mainly due to negative product and channel mix, inventory write-offs, revenue declines and higher-than-expected production costs.
Over the last four quarters, the company has surpassed consensus EPS estimates two times.
Q4 earnings highlights include:
- Adjusted EBITDA of $104 million, down $34 million year-over-year; adjusted EBITDA of $139 million excluding Honeywell reimbursement agreement cash payments
- GAAP net Loss of $9 million; adjusted Net Income of $48 million, or $83 million excluding Honeywell reimbursement agreement cash payments
Full-year highlights include:
- Net revenue of $5 billion, up 3% year-over-year on a GAAP basis and 5% on a constant currency basis
- Adjusted EBITDA of $362 million; adjusted EBITDA of $502 million excluding Honeywell reimbursement agreement cash payments
- GAAP net income of $36 million; adjusted net encome of $135 million, or $275 million excluding Honeywell reimbursement agreement cash payments
In a press release, the company said although its full-year 2019 results were impacted by a number of challenges in its Products & Solutions business, proactive steps are being taken to drive improved performance. The following slide from the company’s earnings presentation listed the following 2019 challenges and areas of focus.
“We understand the issues that impacted our Products & Solutions business in the second half of 2019, and we are actively working to improve performance,” states Andy Teich, lead independent director of Resideo. “In particular, under the leadership of Sach Sankpal, who became the president of the Products & Solutions business in January 2020, we are in the process of redesigning our new product introduction process, focusing on our value engineering initiatives to lower product costs for our existing platforms and enhancing our product management capabilities.”
