CSP (NASDAQ:CSPI) Issues Earnings Results

Key Points

• Third-quarter results weakened: Revenue fell to $14.4 million from $15.4 million year over year, while the net loss widened to $846,000, or $0.09 per share, due to hardware delivery delays, higher expenses and U.K. pension buyout costs.
• Supply constraints remain a major headwind: Technology Solutions backlog rose 65% as hardware lead times exceeded 200 days, and management expects disruptions to persist for at least another year, delaying revenue recognition.
• Growth prospects continued in key businesses: AZT PROTECT reported a 100% renewal rate and advanced several enterprise opportunities, while managed cloud services added multiyear contracts and improved service gross margin. Despite these positives, the stock was down 2.7% and carries a consensus “Sell” rating.

CSP (NASDAQ:CSPI - Get Free Report) posted its quarterly earnings results on Friday. The information technology services provider reported ($0.09) earnings per share for the quarter, Zacks reports. CSP had a negative return on equity of 0.25% and a negative net margin of 0.20%.

Here are the key takeaways from CSP's conference call:

• Third-quarter revenue declined to $14.4 million from $15.4 million year over year, while the net loss widened to $846,000, or $0.09 per share, from $264,000. Results were affected by hardware delivery delays, higher expenses, and costs related to the U.K. pension buyout.
• Technology Solutions backlog increased 65% year over year as hardware lead times extended from roughly 30–60 days to more than 200 days; management expects supply constraints could persist for at least another year, delaying revenue recognition.
• AZT PROTECT advanced through several large enterprise opportunities, including six-figure deals nearing the end of 18–24-month sales cycles. The company also reported a 100% renewal rate at customer sites reaching their one-year renewal period, a third South African telecom purchase order, and completed integration with Acronis ahead of a planned fall launch.
• Managed cloud and service operations continued to grow, including a six-year, seven-figure agreement with a professional sports team and a three-year agreement expected to generate mid-six-figure annual recurring revenue. Service gross margin improved by 1.3 percentage points year over year.
• CSPi ended the quarter with $24.7 million in cash and continued supporting customer financing, while maintaining its $0.03-per-share dividend and repurchasing approximately 13,000 shares.

CSP Trading Down 2.7%

Shares of CSPI stock traded down $0.23 during mid-day trading on Friday, reaching $8.13. The stock had a trading volume of 32,915 shares, compared to its average volume of 25,862. The firm has a market capitalization of $81.94 million, a PE ratio of -813.50 and a beta of 0.85. The stock's 50-day moving average price is $8.35 and its two-hundred day moving average price is $9.00. CSP has a 52-week low of $7.45 and a 52-week high of $15.00.

Institutional Investors Weigh In On CSP

Several institutional investors and hedge funds have recently bought and sold shares of CSPI. Visionary Wealth Advisors increased its position in shares of CSP by 2.4% during the fourth quarter. Visionary Wealth Advisors now owns 764,888 shares of the information technology services provider's stock valued at $9,561,000 after buying an additional 17,728 shares during the period. Geode Capital Management LLC grew its holdings in shares of CSP by 1.7% during the 4th quarter. Geode Capital Management LLC now owns 163,385 shares of the information technology services provider's stock worth $2,043,000 after acquiring an additional 2,739 shares during the period. JPMorgan Chase & Co. grew its holdings in shares of CSP by 14.4% during the 2nd quarter. JPMorgan Chase & Co. now owns 26,079 shares of the information technology services provider's stock worth $337,000 after acquiring an additional 3,279 shares during the period. Jane Street Group LLC raised its position in shares of CSP by 73.4% in the 1st quarter. Jane Street Group LLC now owns 27,640 shares of the information technology services provider's stock worth $424,000 after acquiring an additional 11,703 shares in the last quarter. Finally, Goldman Sachs Group Inc. lifted its stake in shares of CSP by 66.0% in the 1st quarter. Goldman Sachs Group Inc. now owns 29,800 shares of the information technology services provider's stock valued at $457,000 after purchasing an additional 11,850 shares during the period. Hedge funds and other institutional investors own 26.74% of the company's stock.

Analyst Upgrades and Downgrades

Separately, Weiss Ratings restated a "sell (d+)" rating on shares of CSP in a report on Friday, August 7th. One equities research analyst has rated the stock with a Sell rating, According to MarketBeat, the stock presently has a consensus rating of "Sell".

About CSP

CSP Inc develops and markets IT integration solutions, security products, managed IT services, cloud services, purpose-built network adapters, and cluster computer systems for commercial and defense customers worldwide. It operates in two segments, Technology Solutions and High Performance Products. The Technology Solutions segment provides third-party computer hardware and software as a value-added reseller to various customers in web and infrastructure hosting, education, telecommunications, healthcare services, distribution, financial and professional services, and manufacturing industries.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.

Continue following MarketBeat

Add MarketBeat as your preferred source on Google to see our latest stories in your feed.

Add As Preferred Source