UEI Q1 Revenue Disappoints but Shares Rise on Looming Remote Rollout

Universal Electronics’ Q1 revenue came in short of expectations at $151.2 million, vs. $132.7 million a year ago, due to weakness in Latin America, a $1 million shortfall in Europe and an Australian retailer’s bankruptcy, said the company. But shares closed 3.3 percent higher Friday at $64.93 ahead of what CEO Paul Arling called the early stages of a “significant rollout” of advanced remote controls by CE and subscription broadcast customers. The premium remotes “set the stage for double-digit revenue growth and margin expansion,” said Arling. In a recap of the UEI earnings call, Dougherty & Co. analyst Steven Frankel said Comcast has deployed more than 6 million UEI voice remotes, including 2 million in Q1, and the X1 has penetrated 35 percent of the video base toward a goal of 50 percent by year end. Consumer revenue dropped from $11.2 million to $10 million, contributing 6.6 percent of sales, the company said. UEI has “orders in hand” for advanced remote controls covering nearly 20 percent of the world's subscription broadcast customers, said Frankel. With UEI’s current customer base at nearly half of the world’s subscribers, Frankel expects additional advanced remote wins and projects “sustained double-digit growth” over the next several years. Q1 revenue and earnings didn’t meet projections, but “we don't want to miss the big picture” that UEI’s advanced remote controls “are making a difference,” Frankel said, citing the X1 and XR-11 voice remotes. He also called out the latest Sony and Samsung TVs with QuickSet 3.7, which, according to a Wall Street Journal review, are setting a “new high water mark” for the customer viewing experience.