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Shares of Sierra Wireless Inc. (NASDAQ: SWIR) were up 16.7% as of 1:00 p.m. EDT on Friday after the Internet of Things pure play announced strong first-quarter 2017 results.
Quarterly revenue jumped 13.3% year over year to $161.8 million, including 10% growth in OEM Solutions to $133 million, 44.8% growth in enterprise solutions revenue to $21.7 million, and a 2.1% increase in cloud and connectivity services to $7.1 million. Net income nearly tripled from the same year-ago period to $7.7 million, or $0.24 per share.
By comparison, Sierra Wireless' guidance provided last quarter called for lower revenue of $152 million to $161 million and adjusted earnings per share in the range of $0.13 to $0.20.
IMAGE SOURCE: SIERRA WIRELESS, INC.
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Sierra Wireless also made a small acquisition at the end of the quarter, paying $3.2 million in cash for the assets of GlobalTop Technology's GNSS embedded module business. For perspective, that business generated roughly $5 million in revenue over the past 12 months while roughly breaking even on the bottom line. But it should significantly expand Sierra Wireless' portfolio of cellular, Wi-Fi, and Bluetooth modules in key markets including asset tracking, telematics, drones, and automotive.
For the current quarter, Sierra Wireless anticipates revenue of $165 million to $175 million, which should translate to adjusted earnings per share of $0.24 to $0.32. Keeping in mind that includes a full quarter's contribution of GlobalTop's GNSS business -- which would kick in revenue of roughly $1.25 million and no earnings, assuming its results are steady throughout the year -- both ranges sit significantly above investors' expectations for adjusted earnings of $0.16 per share on revenue of $155.9 million.
In the end, this was a cut-and-dried case of Sierra Wireless beating expectations and offering encouraging guidance -- and it's no surprise to see shares trading higher today.
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