What happened
iRobot (NASDAQ: IRBT) stock collapsed in a frenzy of selling Thursday morning after the company reported a sizable earnings miss last night -- and hinted at more misses to come.
Heading into the fourth quarter of 2021, analysts didn't hold out high hopes for iRobot, predicting the Roomba maker would lose $0.91 per share on sales of $463.8 million. Even so, the company managed to trip over that low bar. Sales for the final quarter of 2021 were only $455.4 million, and the company reported a loss of $1.05 per share, pro forma.
iRobot stock is down 15.2% as of 10:35 a.m. ET today.
Image source: Getty Images.
So what
iRobot management tried to put a brave face on the results, highlighting "44% growth in connected customers during 2021." Investors were having none of that, though, and I can't say I blame them.
Citing "ongoing semiconductor chip constraints and shipping delays that impacted our ability to fulfill approximately more than $35 million in orders," iRobot was forced to admit that sales sank 16% year over year in Q4, and that the company swung from a Q4 profit a year ago to a Q4 loss this time around. In fact, losses per share according to generally accepted accounting principles (GAAP) were even more severe than the company's $1.05 pro forma estimate makes it appear.
When calculated according to GAAP, iRobot lost $1.17 per share in Q4.
Now what
Not all the news was bad, though. iRobot still ended 2021 with sales up 9% at $1.6 billion, and held onto a full-year profit as well -- $1.08 per share, GAAP. (Albeit, that was down 79% from 2020.) The company also predicted that, in 2022, revenue will revive to about $1.8 billion -- at least a 12% bounce back from 2021's decline.
Sadly, the same won't be true about profits. Continuing Q4's slide, iRobot predicts that over the course of 2022, its earnings will range from a loss of $0.23 per share to a profit of $0.27. At the midpoint of guidance, that works out to a prediction of just $0.02 earned per share -- and even in the best case, a 75% decline in profits from 2021's already reduced level.
No wonder iRobot investors are upset.
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool owns and recommends iRobot. The Motley Fool has a disclosure policy.
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