Turtle Beach (HEAR), a maker of headsets and other video game peripherals, late Thursday beat Wall Street's targets for the holiday quarter but warned of slowing growth in 2021. HEAR stock fell in extended trading.
XThe San Diego-based company earned an adjusted 84 cents a share on sales of $132.9 million in the December quarter. Analysts expected Turtle Beach earnings of 78 cents a share on sales of $131.4 million. On a year-over-year basis, earnings rose 1% while sales climbed 31%.
On Feb. 10, Turtle Beach reported preliminary fourth-quarter results that were well above Wall Street estimates. HEAR stock spiked to a seven-year high of 35.74 on the news. However, recently it has pulled back amid the tech stock sell-off.
For the first quarter, Turtle Beach expects to earn an adjusted 45 cents a share on sales of $88 million. Wall Street predicted earnings of 1 cent a share on sales of $54.6 million. In the March quarter last year, Turtle Beach lost 23 cents a share on sales of $35 million.
Turtle Beach Predicts Earnings Drop In 2021
For the full year, it forecast adjusted earnings of $1.35 a share on sales of $370 million. Analysts were looking for earnings of $1.41 a share on sales of $365.2 million. In 2020, Turtle Beach earned an adjusted $2.22 a share on sales of $360.1 million.
In after-hours trading on the stock market today, HEAR stock fell 1.6%, near 28. During the regular session Thursday, HEAR stock fell 2.7% to 28.46.
"While the gaming accessories market may slow a bit in 2021 because of how strong growth was in 2020, we expect that our continued growth in PC accessories, as well as entry into new categories will allow us to grow revenues to record levels in 2021," Chief Executive Juergen Stark said in a news release.
Turtle Beach benefited from stay-at-home orders during the Covid-19 pandemic in 2020. Consumers spent more on video game products and other home entertainment during the lockdowns. They also bought Turtle Beach headsets for work-from-home and school-at-home applications.
HEAR Stock Ranks First In Its Industry Group
Turtle Beach competes with Corsair Gaming (CRSR), Logitech (LOGI) and others in the video game accessories market.
PC and printer maker HP (HPQ) jumped into the market on Feb. 24 with its $425 million purchase of gaming accessory brand HyperX. HyperX's product portfolio spans a range of gaming peripherals, including headsets, keyboards, mice, mouse pads, USB microphones, and console accessories. HP expects the deal to close in second quarter.
HEAR stock ranks first in IBD's Consumer Products-Electronics industry group, according to the IBD Stock Checkup tool. It has an IBD Composite Rating of 98 out of 99. IBD's Composite Rating is a blend of key fundamental and technical metrics to help investors gauge a stock's strengths. The best growth stocks have a Composite Rating of 90 or better.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
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