Emerson Radio Corp (NYSEMKT:MSN) reported second quarter earnings results and the company lost about 25% in product sales when compared to the same period a year ago. They came in at $12.9 million. Houseware product sales lost ground also losing about 28% from the same period. The bright spot was licensing revenue which showed a growth of 28% and adding $1.4 million to the company’s total revenue. Audio sales also grew coming in at $400k or a 64% gain when compared to the same period. Licensing is bolstered by the company’s Emerson brand of products.
Total revenue for the quarter came in at $14.2 million which is a loss of 22% compared to the second quarter of 2014. Net revenue for the recently completed six-months of 2015 also decreased coming in at $37.7 million. Household products have been the drag on revenue growth and Emerson Radio Corp (NYSEMKT:MSN) is having trouble selling its line of refrigerators, microwaves and wine coolers.
Operating income was $30Kfor the period which is also a decrease of 85% when compared to the first six months of 2014. The company also has a debt-to-equity ratio of 0 and that is one of the positives in the company’s balance sheet.
Emerson surprised shareholders by announcing it would issue a extraordinary cash dividend of .70 cents. Despite the slowing of revenue the company used the dividend to change the image of itself with investors. Higher costs of sales and lower actual sales were to blame for the low profits. EPS came in flat which is also lower than the same period which had reported at 1 cent. Pressure on pricing also affected the company’s numbers as competition forced Emerson Radio Corp (NYSEMKT:MSN) to discount deeply to remain competitive in the marketplace.
The stock has built a thick band of support at its current level and has traded sideways for about two months. It needs a catalyst to take it off this level and the earnings report failed to fill that need.