MIDDLETOWN, R.I. – KVH Industries, Inc. (Nasdaq: KVHI) felt the impact of a softness in the marine market in the fourth quarter, it suggested in a recent statement.
Preliminary, unaudited results indicate the company will report revenue of approximately $17.2-$17.4 million and roughly breakeven earnings for the fourth quarter of 2006 as a result of slower than expected growth in the company's marine satellite systems in the quarter as well as unexpected scheduling changes of confirmed military orders, which are now expected to ship in 2007, the company reported. The projected earnings include approximately $0.02 per share impact from stock option expenses.
"These results are below our original expectations for the quarter,” said Martin Kits van Heyningen, KVH's president and chief executive officer. “However, we do not believe the factors involved are representative of any long-term trends. While we were affected by an unexpected softness in the marine market, marine sales in the fourth quarter were still up compared to last year, and we believe that we are continuing to gain market share with our new products. In fact, our overall mobile communications sales were up more than 15 percent for the quarter compared to last year, reflecting some growth in marine sales as well as a strong increase in sales to the land market compared to the same period last year.”
He added that the company expects 2007 revenue will be approximately $87 to $92 million, or approximately 10 percent to 17 percent above its expected 2006 full year revenue.
“We expect that GAAP earnings will be between $0.40 to $0.48 per diluted share, up approximately 67%-100% over fiscal year 2006, which we project to be approximately $0.24 per diluted share,” he stated. “These expectations include a more cautious outlook for the next few quarters in the marine business."
KVH's fourth quarter closed on December 31, and the company's 2006 results are subject to the completion of the year end audit. The company expects to release its fourth quarter and full year results for 2006 by mid-February 2007.
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