UEI Could Benefit From Shift Away From Low-End Remotes: Colliers
Universal Electronics Inc. is positioned to benefit from TV OEMs’ shift from low-margin remote controls to higher-margin chips and embedded software in new products that broaden its addressable market, Colliers' Steven Frankel wrote to investors Monday. UEI reports Q2 Thursday.…
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Colliers will be looking for an update on supply chain constraints, which management said on the Q1 call could have an impact on Q2 revenue. UEI “continues to face challenges and has been unable to deliver consistent year-over-year revenue growth,” said the analyst. The company has been “battling headwinds from the pandemic, a mix shift from finished remotes to higher margin software/chips and the de-emphasis of some lower margin products,” said Frankel. Colliers modeled UEI’s Q2 revenue at $157.9 million vs. the company’s guidance of $153 million-$163 million. Frankel cited some MVPDs’ strategy to push consumers toward apps rather than set-top boxes and referenced UEI’s Android and Apple TV solutions. He noted a Sky Brasil Android set-top box/voice remote combo and a Deutsche Telekom offering that pairs an Apple TV with UEI’s remote. Gross margin expansion is one of the hallmarks of UEI’s transition as it shifts from finished remotes to software and chips and ramps up licensing of additional software offerings such as those seen in 2021 LG TVs, he said.