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Roomba Maker iRobot Short-Circuits On 2016 Guidance

Home robot maker iRobot ( IRBT ) malfunctioned on Thursday after giving disappointing 2016 guidance. IRobot stock fell 14.2% to 28.39 on the stock market today . The maker of Roomba robotic vacuum cleaners reported fourth-quarter results that beat Wall Street’s targets. IRobot earned 65 cents a share on sales of $206.4 million for the quarter ended Jan. 2. Analysts polled by Thomson Reuters expected iRobot to earn 57 cents a share on sales of $202.8 million. On a year-over-year basis, EPS was up 110%, and sales were up 30%. However, investors were let down by the company’s Q1 and full-year guidance. IRobot expects to break even in Q1 on sales of $130 million, based on the midpoint of its guidance. Analysts were modeling for earnings per share of 25 cents on sales of $137.9 million. For the full year, the Bedford, Mass.-based company is targeting $1.30 EPS on $636 million in sales at the midpoint of guidance. Analysts were looking for $1.64 EPS on sales of $692.9 million. IRobot’s guidance includes the sale of its defense and security robot business to a private equity group, announced last week . Piper Jaffray analyst Troy Jensen on Thursday reiterated his neutral rating on iRobot stock but cut his price target to 30 from 35. “We continue to view iRobot as one of the better-positioned companies in the emerging consumer robot market and believe robot adoption in the household is increasing,” Jensen said in a report. “We expect further distribution of the Roomba 980, stronger marketing focus in wet floor care and new product introductions to represent solid catalysts in 2016.” In addition to Roomba vacuums, iRobot also makes Scooba floor-washing robots, Mirra pool-cleaning robots and Looj gutter-cleaning robots. “Revenue, excluding (defense and security), is expected to grow 11% to 13% in 2016 as we expand worldwide distribution of Roomba 980, tap further into a large and growing market in China and build our wet-floor care business,” iRobot CEO Colin Angle said in a statement . RELATED: IRobot Sells Military Robot Division To Focus On Home Robots .

iRobot Sells Military Robot Division To Focus On Home Robots

Bedford, Mass.-based iRobot ( IRBT ) is selling its defense and security robot business to a private equity firm so it can focus on its core home robot business, best known for the Roomba vacuum cleaner. Arlington Capital Partners of Chevy Chase, Md., agreed to pay up to $45 million for the division, which makes four classes of robots: the FirstLook, SUGV, PackBot and Kobra. Those robots are used by the U.S. military and other organizations for reconnaissance, bomb disposal and other critical missions. The deal includes contingent payments based on the unit achieving certain milestones. IRobot has been under pressure from activist investor Red Mountain Capital Partners to divest the military robot business to improve its operating focus. The transaction is expected to close in the next few months. Also Thursday, iRobot reaffirmed its fourth-quarter earnings guidance provided on Oct. 20. It expects results to be at the high end of its previously given range. IRobot is scheduled to report Q4 earnings next Wednesday after the market close. Analysts polled by Thomson Reuters expect iRobot to earn 57 cents a share on sales of $202.6 million. On a year-over-year basis, earnings per share are forecast to rise 84% with sales up 27%. IRobot CEO Colin Angle said the company had a successful holiday season, led by the Roomba 980 Series robot. “Sell-through across iRobot’s Roomba family was greater than we had anticipated in the U.S. despite reported weakness in general retail. Likewise, demand in China was very strong throughout the fourth quarter,” Angle said in a statement . Plus, iRobot said it will expand its current share repurchase initiative by $65 million, including the expected proceeds from the transaction, bringing the total 2016 program to more than $100 million. IRobot stock rose 6.1% to 34.41 on the stock market today . Arlington Capital said the iRobot military robot business will operate as an independent company with a new name. In a statement , Arlington Capital managing partner Peter Manos said his firm will help the new company expand its presence in defense, security and industrial robotics “through organic investment and acquisitions.”

IRobot under the gun to divest defense robot unit

Despite pressure from a major investor to focus solely on home cleaning robots, iRobot (IRBT) should stick to its guns and keep its defense and security robot business, Canaccord Genuity analyst Bobby Burleson said Wednesday. Red Mountain Capital Partners disclosed Tuesday that it had taken a 6.1% ownership stake in iRobot. In an open letter to management, Red Mountain Capital urged iRobot to focus on its core consumer robot business, explore