Technical Communications Corporation (NASDAQ: TCCO) is running for the top in the market this morning, trading on gains of more than 250%. The gains started after the company reported its financial results for the quarter and full year ended September 28, 2019, regaining profitability. Here’s what’s happening:
TCCO Stock Is Headed For The Top On Profitability News
In a press release issued late yesterday, Technical Communications Corporation reported its results for the full year and quarter ended September 28, 2019. Here’s what we saw from the report:
- Quarterly Revenue – For the fourth quarter, the comapny reported revenue in the amount of $2.749 million. This figure came in well ahead of the revenue reported one year earlier in the amount of $1.137 million.
- Quarterly Net Income – In terms of net income, the company is in the profit, generating net income of $1.032 million in the quarter. That works out to $0.56 per share. In the same quarter last year, the company generated a net loss of $259,000, or $0.14 per share.
- Annual Revenue – Revenue for the 2019 year came in at $7.024 million, smashing the $3.685 million that was reported last year.
- Annual Net Income – Finally, for the full year TCCO generated net income in the amount of $631,000, working out to $0.34 per share. In the 2018 year, the company generated a loss of $1.48 million, or $0.80 per share.
As you can see from the numbers, the name of the game today is a return to profitability. In a statement, Carl H. Guild, Jr. President and CEO at TCCO, had the following to offer:
The Company experienced a return to profitability in fiscal year 2019. The Company completed delivery of several foreign and domestic contracts for its DSP 9000/HSE 6000 radio encryption products. It also provided significant engineering services under contracts that were completed in fiscal 2019.
Offering high-end custom cryptographic services and solutions is an established market niche for the Company and we believe an important competitive differentiator. In fiscal 2019, custom TCCO equipment and services continued to provide recurring revenue opportunities within the Company’s established government systems product line; such equipment sales consisted primarily of our DSP 9000/HSE 6000 radio encryption and digital encryption CX7211 products, along with custom solution engineering services.
Why Investors Are Sending The Stock Soaring
At first glance, a return to profitabiity is exciting, but it’s not usually 250% gains exciting. So, what’s the deal? Here’s how I see it:
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