After rapid growth from 1996 to 2000, when sales more than doubled to $1.45 billion, the increase in the top line slowed and in five years sales have only moved to $1.76 billion. Operating income actually peaked as long ago as 1999 when it hit $177 million. Operating income in 2005 was only $54 million.
Symbol traded over $30 five years ago. During the current 52-week period, the range has been $8.01 to $14.15 and stands at about $10.90 now.
Fourth quarter revenue was flat to slightly down compared to both the immediate previous quarter and the same quarter a year ago. The top line came in at $439 million. Gross profit margins were fairly steady at 45% and net income was $24 million, below the $28 million plus the year before.
The company has also guided for Q1 06 to be flat to slightly down.
Symbol has announced several new products. One improves wireless coverage and security. Another is a laser bar code scanner aimed at small businesses. Yet another improves tracking of inventory using radio frequency identification. But, none of these have seemed to move the needle.
Symbol has also prevailed in recent patent litigation against Metrologic, but the sum involved, $14.8 million, is not likely to turn any heads.
There is nothing particularly wrong with the Symbol Technologies businesses, but, there is nothing terribly right with them either. Until the company shows that new products can improve revenue or that current products have unanticipated markets, the stock is not likely to move much from around $10.
Douglas A. McIntyre is the former Editor-in-Chief and Publisher of Financial World Magazine. He was also president of Switchboard.com when it was the 10th most visited website in the world, according to MediaMetrix. He has been chief executive of FutureSource, LLC and On2 Technologies, Inc. and has served on the boards of TheStreet.com and Edgar Online. He does not own securities in companies he writes about. McIntyre can be reached at firstname.lastname@example.org.