iRobot shares surge on strong sales of Roomba vacuum cleaners

Thursday 27th, July 2017 / 13:31 Written by
iRobot shares surge on strong sales of Roomba vacuum cleaners

Shares in iRobot Corp jumped 23% to a record high on July 26 after the Roomba robotic vacuum maker posted better-than-expected quarterly results and said it was buying its largest European distributor.

The stock surged by US$21.27 (RM90.95) to US$109.03 (RM466.21) and was on track for its biggest one-day percentage gain since 2010.

The Bedford, Massachusetts-based company’s revenue rose to US$183.1mil (RM782.94mil) in the second quarter from US$148.7mil (RM635.84mil) the same quarter last year, beating average analyst expectations of US$174.7mil (RM747.02mil), according to Thomson Reuters data.

Fueled by strong growth in the United States and Europe, iRobot also raised its full-year revenue and earnings projections.

Sales volumes of its vacuum cleaners during Amazon.com Inc’s Amazon Prime Day on July 11 more than doubled from the same promotion last year, the company said in a statement.

iRobot announced late on Tuesday the US$141mil (RM602.92) acquisition of privately held Robopolis SAS, its main distributor in Europe and the Middle East.

“We believe iRobot remains a clear market leader in the high-end category,” Loup Ventures analyst Andrew Murphy wrote in a research note on July 26.

Other robot makers with an advantage over legacy vacuum cleaner companies include Neato Robotics, Ecovacs Robotics and Samsung Electronics, Murphy said.

The market for smart home devices was worth US$9.8bil (RM41.9bil) in 2016 and is projected to grow 60% this year, according to market research firm IHS Markit.

In addition to sweeping up dirt, Roomba vacuums collect spatial data on households that could prove valuable to companies developing so-called smart home technology.

Reuters reported on July 25 that iRobot could reach a deal to sell its maps in the next couple of years, which would provide the company a fresh revenue stream.

Also on July 25, Bloomberg reported that SoftBank Group Corp had taken a stake of less than 5% in the company. An iRobot spokesman declined to comment on July 26, and a spokesperson from SoftBank could not immediately be reached for comment.

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