LED billboard manufacturer Daktronics returned for profitability for the financial quarter ended July 30, 2016. The market liked what it heard because Daktronics Stock ended the day up 18% to $8.18.
Here are highlights from the Daktronics First Quarter Fiscal 2017 earnings release, investor presentation and seeking alpha earnings call transcript.
- Revenue increased by $6 million (5%) to $157 million for the quarter ended July 30, 2016 due entirely to increased sales for live events and scoreboards. The company’s commercial revenues (which include digital billboards) declined by 16% to $36 million during the second quarter of 2016. This was not a surprise in light of the weakness of new commercial orders in the prior quarter.
- Net income increased by $1.8 million (46%) to $5.5 million for the quarter ended July 30, 2016 due to increased sales. This is much improved from the previous financial quarter in which Daktronics reported a loss of $2.9 million for the quarter ended April 30, 2016 due to high warranty expenses and weak sales.
- The outlook for the Commercial Division which includes digital billboards is brightening. Commercial orders increased by $10 million (29%) to $45 million during the three months ended July 30, 2016 due to an increase in spectacular orders. Orders will translate to sales during the next fiscal quarter as units are built and delivered. Reese Kurtenbach said this when asked about the outlook for the commercial division.
While it’s more difficult to predict the Commercial and Spectacular segment, there are many opportunities in our pipeline that position us for increase year-over-year. For commercial billboard niches, we expect similar volumes based on the overall activity we see in the national and third-party advertisers.
- Daktronics identifies Watchfire, Formetco and Optotech as competitors in the digital billboard industry. Optotech is a Hsinchu Taiwan digital sign manufacturer which works closely with Outfront.
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