DecisionPoint Systems Inc. (DPSI), a provider of enterprise mobility and RFID solutions, reported its third-quarter financial results Tuesday, revealing mixed outcomes. The company announced earnings per share (EPS) of 13 cents for the quarter, surpassing analyst estimates of 7 cents, yet it saw a decline from the previous year’s figures. Despite this earnings beat, DPSI experienced a slight miss in revenue expectations, with its revenues increasing by 5.4% year over year to $27.1 million but falling short of the consensus estimate by 3.4%.
The revenue growth was primarily driven by an increase in software and services revenues and contributions from recent acquisitions like Macro Integration Services (MIS). However, not all segments performed equally. The company’s hardware revenues, which accounted for 51.7% of total revenues, declined by 27.1% year over year to $14 million. On a brighter note, software and services revenues jumped to $11.7 million from $4.7 million in the same quarter last year.
Despite the challenges in certain revenue streams, DPSI managed to improve its gross profit significantly by 30.3% to $7.5 million, although operating income saw a marginal reduction of 0.7% to nearly $1.5 million.
The company's stock reacted positively on Tuesday, climbing 15.8% to close at $5.78 following the earnings announcement. However, this increase comes against the backdrop of a 1.9% decline over the past year.
DPSI also provided insights into its financial position as of September 30, with cash and cash equivalents reported at $3.6 million, down from $7.2 million as of June 30, 2023. The company has been actively managing its debt levels, reducing its long-term debt to $5.7 million from $6.9 million reported on June 30 and repaying another $1.5 million related to the MIS acquisition due to strong cash flow generation.
Looking ahead to the full year 2023, DPSI has set projections for revenues between $111 million and $113 million and anticipates an Adjusted EBITDA in the range of $8.9-$9.2 million.
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