Ituran Location and Control Ltd. posts Q2 earnings just shy of the Street
Shares of Ituran Location and Control Ltd. (Nasdaq: ITRN) are trading lower today after the vehicle tracking systems maker reported second quarter earnings a penny shy of the Street.
For the three months ended June 30, the Azour, Israel-based company recorded earnings of $0.18 per diluted share, while seven analysts polled by Thomson Financial were expecting $0.19 per share on average. For the second quarter last year Ituran had earnings of $0.20 per diluted share.
Ituran booked revenues of $29.2 million for the second quarter, which is a 17% increase over revenues of $25.0 million in the second quarter of last year. Six analysts surveyed by Thomson Financial were anticipating revenues of $28.50 million on average.
Ituran said the increase in revenues was driven by the continued growth in the company's subscriber base, growth in end-unit sales and revenues from its ERM business, (vehicle alarm and GPRS tracking systems) which the company acquired at the end of 2006.
Subscribers increased 43,000, or 11.4%, to 418,000 in the second quarter from a level of 375,000 subscribers in the second quarter of 2006.
For the second half of the year, Ituran management said it expects expenses to increase at a slower pace than revenues and as a result said it expects operating margins to improve.
Eyal Sheratzky, Co-CEO of Ituran said the company is facing higher expenses due to investment in customer support and marketing, including the company’s GPS system launched in the third quarter.
Ituran closed its acquisition of MAPA group at the end of the second quarter. MAPA is Israel’s largest provider of geographic information and owner of geographic information database for navigation in Israel.
"We believe our recently launched GPS system in Israel complements our existing services, and fits our strategy of continuously expanding the scope of the location-based services that we can offer to our customers,” Sheratzky commented.
Shares of Ituran slid $0.49, or 4.08%, to $11.51 in mid-day trading Monday.
