Sequans Communications (SQNS) Q1 EPS In-Line, Slight Miss on Revenues; Offers In-Line 2Q EPS/Revenue Outlook

Sequans Communications (NYSE: SQNS) reported Q1 EPS of ($0.08), meeting the analyst estimate of ($0.08). Revenue for the quarter came in at $11.2 million versus the consensus estimate of $11.24 million.

First Quarter 2018 Highlights:

• Revenue: Revenue was $11.2 million, flat compared to the fourth quarter of 2017 and a decrease of 9.6% compared to the first quarter of 2017, reflecting a decrease in broadband product revenue partially offset by an increase in other revenue. IoT related revenue was up significantly, both sequentially and compared to the first quarter of 2017.
• Gross margin: Gross margin was 41.7% in both the first quarter of 2018 and the fourth quarter of 2017 compared to 47.1% in the first quarter of 2017, primarily due to a shift in product mix toward a lower proportion of chips.
• Operating loss: Operating loss was $7.3 million compared to an operating loss of $5.6 million in the fourth quarter of 2017 and an operating loss of $4.2 million in the first quarter of 2017.
• Net loss: Net loss was $8.7 million, or ($0.10) per diluted share/ADS, compared to a net loss $7.6 million, or ($0.10) per diluted share/ADS, in the fourth quarter of 2017 and a net loss of $5.6 million, or ($0.07) per diluted share/ADS, in the first quarter of 2017.
• Non-IFRS Net loss: Excluding the non-cash items of stock-based compensation, the non-cash impact of convertible debt amendments and effective interest adjustments related to the convertible debt and other financings, non-IFRS net loss was $7.5 million, or ($0.08) per diluted share/ADS, compared to a non-IFRS net loss of $5.9 million, or ($0.07) per diluted share/ADS in the fourth quarter of 2017, and a non-IFRS net loss of $4.7 million, or ($0.06) per diluted share/ADS, in the first quarter of 2017.
• Cash: Cash, cash equivalents and short-term deposit at March 31, 2018 totaled $15 million compared to $3.3 million at December 31, 2017.

Q2 2018 Outlook

Sequans expects revenue for the second quarter of 2018 to be in the range of $12.5 to $14.5 million, with non-IFRS gross margin above 40%. Based on this revenue range and expected gross margin, non-IFRS net loss per diluted share/ADS is expected to be between ($0.07) and ($0.08) for the second quarter of 2018, based on approximately 94.5 million weighted average number of diluted shares/ADSs. Non-IFRS EPS guidance excludes the impact of stock based compensation, the non-cash fair-value and effective interest adjustments related to the convertible debt and other financings, and any other relevant non-cash or non-recurring expenses.

GUIDANCE:

Sequans Communications sees Q2 2018 EPS of ($0.08)-($0.07), versus the consensus of ($0.07). Sequans Communications sees Q2 2018 revenue of $12.5-14.5 million, versus the consensus of $13.5 million.

For earnings history and earnings-related data on Sequans Communications (SQNS) click here.

You May Also Be Interested In

• AeroVironment restates quarterly financials, citing $89M goodwill error
• C.H. Robinson acquires DeSpir Logistics for $75 million
• MP Materials seen largely insulated after China export-control move