Sierra Wireless, Inc. (NASDAQ: SWIR, TSX: SW) is reporting third quarter 2008 results. Our results are reported in U.S. dollars and are prepared in accordance with United States generally accepted accounting principles.
"During the third quarter of 2008, we achieved 23% year-over-year revenue growth and record cash flow from operations." said Jason Cohenour, President and Chief Executive Officer. "While our year-over-year revenue growth and cash performance was strong, our results fell short of our expectations as a result of missing an expected product launch with a large wireless operator. Notwithstanding our disappointment about the missed product launch, we are encouraged by the strong revenue performance from our recently launched USB products in the face of stiff economic headwinds, as well as the achievement of several important product launches and strategic milestones during the quarter. The success of our new Compass885 for HSPA networks is particularly notable. This product was launched as the USBConnect Mercury by AT&T during the quarter, and by several other operators in Europe and Asia as well. With respect to strategic developments, we commenced a close development collaboration with Telstra, Qualcomm and Ericsson to launch the world's first HSPA+ network service and device, once again highlighting the strength of our position as an innovative developer of products for the world's latest wireless technologies.
Looking ahead, our short term view is cautious given the macro economic conditions in our key markets and expected erosion in sales of our embedded modules to PC OEMs. Longer term, we continue to be encouraged by the growth opportunities in our market segments. Mobile broadband services continue to expand and improve around the world, customer awareness of these compelling services is growing, market segments and applications are expanding and overall market penetration is still very low. Based on this outlook and our confidence in our ability to execute, we are continuing to invest in further strengthening and broadening our market position."
Q3 2008 Financial Results
Our revenue for the third quarter of 2008 amounted to $136.8 million, gross margin was $37.8 million, or 27.6% of revenue, operating expenses were $27.9 million and net earnings were $7.3 million, or diluted earnings per share of $0.23. We generated a record $22.8 million of cash from operations during the third quarter and our balance sheet remains strong, with $227.3 million of cash, short and long-term investments.
Results for the third quarter of 2008, relative to guidance provided on July 23, 2008 are as follows:
Third quarter revenue for 2008 of $136.8 million was lower than our guidance of $140.0 million. Our earnings from operations were $9.8 million, lower than our guidance of $11.0 million. Our net earnings of $7.3 million, or diluted earnings per share of $0.23, were lower than our guidance of net earnings of $8.5 million, or diluted earnings per share of $0.27.
Results for the third quarter of 2008 compared to the third quarter of 2007 are as follows:
Third quarter revenue increased by 23% to $136.8 million in 2008 from $111.5 million for the same period in 2007. Gross margin for the third quarter of 2008 was 27.6% of revenue, compared to 29.7% for the same period in 2007. Operating expenses were $27.9 million and earnings from operations were $9.8 million in the third quarter of 2008, compared to $21.4 million and $11.6 million, respectively, in the same period of 2007. Net earnings for the third quarter of 2008 were $7.3 million, or diluted earnings per share of $0.23, compared to net earnings of $9.0 million, or diluted earnings per share of $0.33, in the same period of 2007. Our weighted average shares outstanding used in calculating earnings per share increased to 31.3 million in the third quarter of 2008 from 27.7 million in the prior year, primarily as a result of the issuance of 3.8 million shares in our October 2007 public offering. -- www.cnxmarketlink.com
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