Telit Communications updates FY earnings guidance

Telit Communications said on Tuesday that it expects adjusted underlying earnings and earnings per share for the year to come in at the upper end of its guidance.

The AIM-listed enabler of the Internet of Things upped its adjusted earnings before interest, taxes, depreciation and amortisation and earnings per share guidance towards the middle and upper end of the previous range thanks to better gross margin and operational cost discipline.

Telit also narrowed its revenue guidance range.

The company updated its guidance for adjusted EBITDA to between $54m and $59m from $52m to $60m, and its guidance for EPS to 26-30 cents from 24-30 cents.

Telit updated its revenues guidance to between $370m and $375m from $370m to $390m.

In the Americas, it expects revenue growth to be in excess of 20% in the second half and around 15% for the year as a whole.

In EMEA, revenue growth has continued to be modest, mainly on the back of softness in European markets and the very slow technological shift in the region from 2G to 3G and 4G. However, the group expects the region to deliver improved growth next year.

Asia Pacific continues to show strong double-digit growth in revenues and Telit said the outlook for the region is positive.

Telit said it has continued to see strong momentum and growth in customer acquisition in IoT services, end-to-end solutions design wins and factory solutions wins.

The key agreements with SAP and Tech Mahindra have started generating material accounts and will accelerate the group's rate of revenue growth.

Chief executive Oozi Cats said: “Our guidance for adjusted EBITDA and EPS reflects our anticipated double-digit growth for the full year.

"Americas return to double digit growth, together with the growth in APAC and EMEA and the continued strong momentum in our IoT Services business, leaves us well placed to finish the current year strongly."

At 1015 GMT, the shares were up 2.1% to 255p.