Tesco Corporation (USA) (NASDAQ:TESO) reported a wider net loss for the fourth quarter as the top line plummeted 61%. The company’s adjusted loss not only widened on YOY basis but also fell shy of the Street analysts’ predictions. Its revenue also slipped and came in below the Street expectations. On top of this negative news, the company’s board also decided to suspend its quarterly dividend as part of its plan to cut down its expenses.
4Q Loss Widened
Tesco Corporation (USA) (NASDAQ:TESO) said that it suffered a net loss of $78.1 million or a loss of $2.0 a share in the fourth quarter, which was wider than a net loss of $2.1 million or a loss of five cents a share in year-ago quarter. Excluding adjustments, its net loss would have been $13.4 million or a loss of 33 cents a share versus a net loss of $4.8 million or a loss of 12 cents a share in the fourth quarter of 2014. Street analysts’ predicted a loss of 32 cents a share.
The company’s top line plunged 61% to $52.2 million in the fourth quarter from $134.5 million in the previous year quarter. Wall Street estimated the company to deliver revenue of $56.37 million. Sequentially too, the drop in revenue was 15% blaming the lower activity and weaker revenues in Latin America and North America for its rental and AMSS offerings.
Preservation Of Cash
Tesco Corporation (USA) (NASDAQ:TESO)’s decision to suspend its five cents a share quarterly dividend would enable it to conserve about $8 million of cash per year. It was part of a wider plan to cut down its costs, capital expenditures, and working capital. Its CEO, Fernando Assing, said that it would continue to place its business under the hypothesis that the market will continue to remain lower for a long period than one would have expected.
Tesco Corporation (USA) (NASDAQ:TESO)’s CEO said that its immediate objective was to become cash flow neutral. He said that for the purpose of its safety record, its product quality, as well as, service besides the technology would position it to gain more market share. The company would also adapt its business models to establish a competitive, as well as, sustainable firm.