Trimble’s (NASDAQ: TRMB) second quarter 2019 earnings were basically in line with analyst expectations. The company reported diluted earnings per share (EPS) of $0.53, $0.01 short of estimates and $0.02 higher than the second quarter of 2018.
The company attributed the slight year-over-year earnings increase to overall revenue growth, which was offset by higher interest expenses and a higher tax rate. Company leaders see the second quarter result as a win, given current market ambiguity.
“Our second quarter results met expectations despite greater uncertainties,” said Steven Berglund, Trimble’s president and CEO. “Although we anticipate market ambiguities to persist for the remainder of 2019, the business model transformation remains on track. Software, services and recurring revenue grew by 22 percent in the quarter.”
Trimble’s operating income climbed 7 percent year-over-year, coming in at $174.7 million. Net income was $133.8 million, up 3 percent.
Operating cash flow for the first two quarters of 2019 was $325.5 million, up 22 percent as compared to the first two quarters of 2018, according to the company’s earnings release. Deferred revenue for the second quarter of 2019 was $452.4 million, up 27 percent.
The developer saw second quarter revenues of $855.8 million, up 8 percent year-over-year and meeting analyst expectations. Revenue growth was lead by the building and infrastructure segment, which came in at $339.9 million, climbing 22 percent year-over-over.
Trimble’s other business segments saw more modest growth. Geospatial revenue was $164.4 million, down 11 percent from the second quarter of 2018. Transportation revenue was $198.8 million, up 9 percent. Resources and utilities revenue was $152.7 million, up 5 percent.
The company’s geospatial segment took a hit due to a year-over-year decline in original equipment manufacturer (OEM) sales. Company leaders said the decline was largely due to softness in China. The transportation segment, however, got a significant bump from strong electronic logging device (ELD) sales.
The bulk of Trimble’s revenue continued to come from North America, and the North American region saw the strongest revenue growth (17 percent) year-over-year. The company also saw growth in Europe, with revenues growing 10 percent year-over-year.
True to the softness already noted in China, the company’s revenue struggled in Asia-Pacific. Trimble recognized a 16 percent decline year-over-year in the region.
The company expects to see revenues decline in the next few months. For the third quarter of 2019, Trimble expects revenues to be between $789 million and $819 million, with EPS coming in between $0.45 and $0.49.
For the fiscal year of 2019, Trimble expects to report revenue between $3.255 billion and $3.315 billion and EPS of $1.91 to $1.99.
Trimble’s stock was down almost 5 percent at market close Wednesday, July 31. The company reported earnings after market close.