Technology Stock under Consideration: Optical Cable Corporation (NASDAQ: OCC)

On Wednesday, Shares of Optical Cable Corporation (NASDAQ: OCC) inclined 2.73% to $4.90. The stock opened its trade at $4.77 and after floating in a price range of $4.77 to $5.08; the stock grabbed the investor’s attention and traded 13,702 shares as compared to its average daily volume of 41.68K shares. The stock’s institutional ownership stands at 11.40%.

Optical Cable Corporation (NASDAQ: OCC) recently declared financial results for its third quarter ended July 31, 2018.

Third Quarter 2018 Financial Results:

Consolidated net sales for the third quarter of fiscal year 2018 increased 40.7% to $23.10M contrast to net sales of $16.40M for the third quarter of fiscal year 2017. The Company increased net sales in its specialty markets in the third quarter of fiscal 2018, contrast to the same period last year, particularly in its wireless carrier market.  This increase was partially offset by a decrease in net sales in the Company’s enterprise markets.

OCC stated gross profit of $7.00M in the third quarter of fiscal year 2018, a boost of 32.4% contrast to gross profit of $5.30M in the same period last year.  Gross profit margin, or gross profit as a percentage of net sales, was 30.4% in the third quarter of fiscal year 2018 contrast to 32.3% for the same period in fiscal year 2017, mainly because of changes in fiber optic cable product mix.

SG&A expenses increased 17.4% to $6.40M during the third quarter of fiscal year 2018, contrast to $5.40M for the third quarter of fiscal year 2017.  SG&A expenses as a percentage of net sales were 27.6% in the third quarter of fiscal year 2018, contrast to 33.0% during the same period last year, as OCC benefited from its operating leverage.  The increase in SG&A expenses was mainly the result of increases in employee related costs counting employee incentives and commissions, which increased because of increased net sales and the improved financial results during the third quarter of fiscal year 2018.

For the third quarter of fiscal year 2018, OCC recorded net income of $438.0K, or $0.06per basic and diluted share, contrast to a net loss of $295.0K, or $0.05 per basic and diluted share, for the third quarter of fiscal year 2017.

Fiscal Year-to-Date 2018 Financial Results:

Consolidated net sales for the first nine months of fiscal year 2018 increased 44.1% to $67.60M, contrast to net sales of $46.90M for the first nine months of fiscal year 2017.

The Company increased net sales in its specialty markets in the first nine months of fiscal 2018, contrast to the same period last year, particularly in its wireless carrier and military markets.  This increase was partially offset by a decrease in net sales in the Company’s enterprise markets.

OCC stated gross profit of $21.20M in the first nine months of fiscal year 2018, a boost of 34.4% contrast to gross profit of $15.80M in the first nine months of fiscal year 2017.  Gross profit margin was 31.4% in the first nine months of fiscal year 2018 contrast to 33.7% for the same period in fiscal year 2017, mainly because of changes in fiber optic cable product mix counting hybrid cables.

SG&A expenses increased 17.0% to $19.30M during the first nine months of fiscal year 2018, contrast to $16.50M for the first nine months of fiscal year 2017.  SG&A expenses as a percentage of net sales were 28.6% in the first nine months of fiscal year 2018, contrast to 35.2% during the same period last year, as OCC benefited from its operating leverage.  The increase in SG&A expenses was mainly the result of increases in employee related costs counting employee incentives and commissions, which increased because of increased net sales and the improved financial results during the second and third quarters of fiscal year 2018.

OCC recorded net income of $1.40M, or $0.19 per basic and diluted share, for the first nine months of fiscal year 2018, contrast to a net loss of $1.20M, or $0.18 per basic and diluted share, for the first nine months of fiscal year 2017. OCC’s increase in net sales during the third quarter and the first nine months of fiscal year 2018 were driven by noteworthy orders from a large customer.  The Company continues to fulfill orders from this customer, which may have a positive impact on net sales in the fourth quarter of fiscal 2018 contrast to the same period last year.  However, at this time, the Company anticipates that net sales during the fourth quarter will be less than net sales during the third quarter of 2018.

OCC has a market value of $36.70M while its EPS was booked as $0.28 in the last 12 months. The stock has 7.49M shares outstanding. In the profitability analysis, the company has gross profit margin of 31.00% while net profit margin was 1.00%. Beta value of the company was 0.25; beta is used to measure riskiness of the security.

Michelle Smith

Michelle Smith

I am Michelle Smith and I give “Stocks Market Cap” an insight into the most recent news hitting the “Technology” sector in Wall Street. I have been an independent financial adviser for over 11 years in the city and in recent years turned my experience in finance and passion for journalism into a full time role. I perform analysis of Companies and publicize valuable information for shareholder community.