Comtech bumps up '14 earnings, revenue forecast
Comtech Telecommunications Corp. Monday reported declines in first-quarter sales and net income, but announced increases in its dividend and stock buyback programs and raised its earnings and revenue forecast for fiscal 2014.
The Melville-based maker of communications gear said it was increasing its annual dividend target from $1.10 per share to $1.20 per share and doubling its stock repurchase program from $50 million to $100 million.
"We are confident in the overall strength of our business and its ability to continue to generate strong cash flows and have increased our annual target dividend accordingly," Fred Kornberg, Comtech president and chief executive, said in a statement. He said the increase in the stock repurchase program was "based on our view that our stock remains a compelling value."
After the report was released, Comtech shares jumped $2.05, or 6.6 percent, to $33.34 in aftermarket trading.
In the first quarter of fiscal 2014, net income slid to $5.3 million, or 28 cents per diluted share, from $7.4 million or 36 cents per share in the year-ago period, but outstripped analysts' estimates.
Analysts polled by Bloomberg had forecast 22.5 cents per share.
Net sales in the quarter fell 8 percent to $83.4 million from $91 million in the prior year's period. Analysts had predicted sales of $78.2 million.
Kornberg said the company "continued to see the signs of stabilization" in its businesses. Comtech provides advanced communications systems to military and civilian markets.
Comtech raised its revenue guidance for fiscal 2014 from a range of $320 million to $340 million to $325 million to $345 million. The company also increased its projection of diluted earnings per share for the fiscal year from $1.07 to $1.19 to $1.12 to $1.25.
Monday, Comtech announced its Santa Clara, Calif., subsidiary had received an order for about $7 million for specialized radio tubes to be used in an Army satellite communications program.
Comtech's military business has been buffeted by sequestration cutbacks and tighter defense budgets.
About 1,200 people work at Comtech facilities in Massachusetts, California, Arizona and elsewhere.