iRobot Corporation (NASDAQ:IRBT) reported its third quarter earnings after the close, and it was another stellar report, blowing away profit estimates with 27 cents per diluted share and upping full year estimates significantly to 80-82 cents a share, far above consensus estimates of 57 cents. Even that could be too low, given that the company has started making a habit of blowing away estimates.
The star of the show continues to be overseas sales of the Roomba, up 58 percent over last year. Domestic sales are still slow, but prices are rising and iRobot's margins continue to expand — an excellent sign. If there was any pressure from new entrants into the field, like Samsung, the Mint Cleaner from Evolution Robotics or the Neato Robotics XV-11, it didn't show up in their report.
Remember that iRobot's report could have been even better if they had enough product on hand; the company has warned that it will not have enough Roomba manufacturing capacity until early 2011 when a new contract manufacturer comes on board.
The military side of the business also is healthy, with a growing backlog.
One thing I though was interesting is that earnings soared even though research and development spending doubled from $3 million to $6 million. That's a very good sign that iRobot is investing in its future and isn't eating its seed corn. The company is basically putting half of its profit back into the business with R&D, and pocketing the other half. I like that ratio.
The earnings conference call is tomorrow at 8:30 a.m. We'll have live highlights.