iRobot Corporation (NASDAQ: IRBT) stock fell 8.54% on October 8th, 2018 and continued its bearish momentum on October 9th, 2018, falling over 0.8% (as of 9 Oct, 10:13 AM GMT-4; Source: Google finance). Piper Jaffray downgraded the company to “neutral” from “overweight,” and maintained its $90 price target, which is a 14.4% discount to last Friday’s close. In addition to concerns over the stock’s valuation, the firm said trade tariffs could negatively impact the company’s 2019 guidance.
Meanwhile, IRBT was selected for the fourth straight year as a featured product for U.S. Amazon Prime Day. The company’s robots sold out, doubling the Prime Day sales volume as they have each year since the event began in 2015. IRBT was also featured on Prime Day in EMEA and Japan this year for the first time, and the results in those regions were great. Further, the company has announced a favorable initial determination from the International Trade Commission (ITC) regarding the patent infringement claims recommending an exclusion order barring the importation, into the United States, of certain robotic vacuum cleaners. The company has also completed the previously announced stock repurchase program authorizing the purchase of up to $50 million of the common stock. IRBT has announced an increase in the revolving credit facility to $150 million and an extension of the term to 2023, giving the company additional flexibility to execute on the growth strategy. The company has implemented a U.K. principal company to optimize the global operating structure.
Moreover, IRBT has reported the revenue for the second quarter of 2018 of $226.3 million, compared with $183.1 million for the second quarter of 2017. Revenue for the first half of 2018 was $443.4 million, compared with $351.6 million last year. Operating income in the second quarter of 2018 was $13.4 million, compared with $4.1 million in the second quarter of 2017. For the first half of 2018, operating income was $38.8 million, compared with $25.7 million a year ago. Quarterly earnings per share were $0.37 for the second quarter of 2018, compared with $0.27 in the second quarter of 2017. First-half earnings per share were $1.08, compared with $0.85 in the first half of 2017.
During the second quarter 2018, EMEA and Japan saw significant year-over-year growth of 51% and 31%, respectively. EMEA growth was driven in part by the revenue uplift from the acquisition of the largest European distributor, which was closed at the beginning of Q4 2017. Shipments to support Q2 holidays in the United States drove domestic revenue growth of 15% over last year