NTC confirms earnings surge

The hardware company predicts full-year revenue to increase by 40% as it changes its business focus to M2M.

Equipment maker NetComm Wireless (NTC) has reiterated its prediction that current year earnings will surge six-fold while revenue will jump 40% in the current financial year as its change in business focus pays off.

The hardware company made a strategic decision last year to concentrate on the industrial machine-to-machine (M2M) equipment market instead of the mobile and home broadband equipment market, which covers 3G/4G and ADSL technologies.

Supplying the wireless communication components to the M2M market, an area that covers smart power meters and mobile payment solutions, is a more defensive business with more predictable and consistent revenue streams.

NetComm says this is an important year of transition for the company and believes full-year sales will come in between $58 million and $63 million in 2013-14 due to the change in product mix the M2M business contributes 55% of full year revenue compared with 20% a year ago.

Management also reiterated its earnings before interest, tax, depreciation and amortisation (EBITDA) goal of $4.6 million to $5.1 million for the year versus an EBITDA of $803,000 for 2012-13.

Shareholders that participated in Netcomms last capital raising will be hoping that the news will give the stock a boost given that it is trading below the new share offer price of 25.5 cents.

NetComm, which is part of the Uncapped 100, opened half a cent higher at 24.5 cents this morning.