AUSTIN, Texas — Resideo Technologies (NYSE: REZI) on Wednesday reported first-quarter revenues of $1.18 billion, a 3.8% decrease compared to year-ago revenues of $1.22 billion.
The company reported quarterly earnings of 24 center per share, beating the Zacks Consensus Estimate of 13 cents per share. This compares to earnings of 29 cents per share a year ago. The figures are adjusted for non-recurring items.
Over the last four quarters, the company has surpassed consensus earnings per share (EPS) estimates two times.
First-Quarter Performance
Consolidated revenue for the ADI Global Distribution and Products & Solutions segments decreased 3% year-over-year on a GAAP basis and 2% year-over-year on a constant currency basis.
Individually, ADI Global Distribution revenue increased 6%, while Products & Solutions revenue decreased 14%. Revenue in both segments was negatively impacted by the coronavirus pandemic toward the end of the quarter ended March 31. GAAP net loss decreased $69 million, or 144% year-over-year.
Adjusted EBITDA, excluding Honeywell reimbursement agreement cash payments, decreased $28 million or 22% year-over-year.
Despite the pandemic-driven slowdown toward the end of the quarter, ADI constant currency revenue increased in the Americas, EMEA and APAC regions. The wholesale distributor’s adjusted EBITDA remained flat despite higher revenue, pandemic-related employee benefit reductions, among other cost productivity improvements. Unfavorable product line and customer mix as well as commercial investments negatively impacted ADI’s adjusted EBITDA for the quarter.
The Products & Solutions segment reported lower revenue across all lines of business driven by the overlap of a strong prior year quarter, coupled with the impact of the COVID-19 pandemic. The segment adjusted EBITDA decreased from $81 million in the first quarter of 2019 to $53 million, or 35%, driven primarily by lower revenue and unfavorable product mix relating mainly to new product launches in the Security and Comfort businesses.
Cost reduction from on-going transformation programs coupled with COVID-19 pandemic related cost actions partially offset the impact of lower revenue on the segment’s adjusted EBITDA.
“We have been operating through a period of unprecedented challenges for the global economy and our industry,” Andy Teich, the lead independent director of Resideo, stated in a press release. “Our primary focus has been the health, safety and well-being of our employees, professional installers, and customers.”
The company said it has maintained a strong liquidity position throughout the early stages of the pandemic through several measures, including the draw-down of its $350 million revolving credit facility. The company said it plans to continue its focus on cost reduction and cash flow management measures, including reducing net working capital investment and planned capital spending.
On April 23, Resideo and Honeywell announced an agreement to defer until July 30 approximately $42 million in payments that was due to Honeywell in the second quarter, including a $35 million payment due April 30.
The company also announced, given the rapidly evolving operating conditions in the industry due to the COVID-19 pandemic, it would withdraw its full-year 2020 guidance.
