VIZIO beats by $0.06, beats on revs
- Reports Q3 (Sep) earnings of $0.07 per share, excluding non-recurring items, $0.06 better than the FactSet Consensus of $0.01; revenues fell 2.0% year/year to $426.2 mln vs the $418.05 mln FactSet Consensus.
- The TV and other household electronics manufacturer has faced its fair share of adversity this year as big-ticket discretionary purchases have been tossed aside in light of elevated interest rates and cumulative inflation.
- Coinciding with depressed discretionary spending has been a lackluster advertising market, packing a one-two punch against VIZIO, which hosts ads on its connected TVs.
- However, market conditions may finally be turning around. During Q3, VZIO expanded advertising revenue by 27%, sustaining the demand from last quarter when sales jumped +35%.
- Meanwhile, even though the TV market is highly competitive, VIZO competes in the lower-priced categories. By offering 65 and 75-inch TVs at attractive prices, VIZO provides consumers exceptional value, a critical attribute in the current environment.
- That does not mean VIZO is amid a full recovery. Total revenue remained down yr/yr, albeit 1.5 pts better than the decline posted in Q2. TV unit volumes are still down compared to a year ago, reflecting consumers' hesitation to upgrade their TVs and sound bars or add more to their properties.
- Nevertheless, by controlling what it can, i.e., costs, while benefiting from surging growth in its high-margin Platform+ business, VZIO has been able to boast three consecutive quarters of record consolidated gross margins. This financial discipline bodes well for VZIO if the current improving dynamics accelerate.
