Sierra Wireless Sees Q2 Drop from Clearwire, Barnes & Noble

Sierra Wireless reported Q2 revenue of $139.9 million, a decrease of 12% compared to $159.1 million in the second quarter of 2010, and a decrease of 3% compared to $144.3 million in the first quarter of 2011. On a GAAP basis, gross margin was $39.1 million, or 28.0% of revenue, in the second quarter of 2011 compared to $46.2 million, or 29.0% of revenue, in the second quarter of 2010.


The company said its year-over-year revenue decrease was principally driven by the loss of revenue from Barnes & Noble and Clearwire, which together accounted for nearly $25 million in revenue in the second quarter of 2010.


Mobile Computing revenue in Q2 was $66.0 million, down 13% compared to $75.5 million in the second quarter of 2010.


Machine-to-Machine ("M2M") revenue was $73.9 million, down 12% compared to $83.6 million in the second quarter of 2010. Excluding sales to Barnes & Noble, the company's core M2M business increased 14% in the second quarter of 2011 on a year-over-year basis.


"Notwithstanding a slower than expected start to 2011, Sierra Wireless remains well positioned in our two target markets. In Mobile Computing, we are launching several new 4G LTE products with key operators and PC OEMs. In M2M, we continue to build on our global leadership position and successfully drive value chain expansion," said Jason Cohenour, President and Chief Executive Officer. "Our growth drivers remain intact and despite some product launch delays, we expect significant sequential revenue and earnings growth in the second half of 2011."

Looking ahead, the company expects growth to be driven by the launch of new 4G AirCard products, as well as continued steady year-over-year growth in its core M2M product lines.
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