Axis Q2 2014 Growth Up But

By John Honovich, Published Jul 09, 2014, 12:00am EDT (Info+)

Axis' seesaw growth continues. After Axis missed and profits sank in Q1 2014, the second quarter's overall growth numbers improved (20% growth in local currencies). However, the geographical breakout shows this to be an anomaly and downward revised market growth rates indicate future challenges.

Americas ***** ****

******** ****** ******* **** ** ******* weak **% ** ** ** **** 13% ** *** *** *******.

**** ** * ******* *** **** as *** ******** ******* *** *** majority ** ***** ********. ** **** points ** **** ********** ** **** share ** *** ******** ** *** likes ** ********, *********, *******, ***.

EMEA Huge ****

** ********, **** ******* ** *** *** quarter *** ** **% **** **** year. ***** **** ** ****, **** acknowledges ** ** *** * **** 2013 **** *** ** ****** ********* unsustainable ** **** *****. *******, ****'* macroeconomic ********** / ********** ******.

Downward ****** ****** *****

*** *** **** *** *****, **** cited "*** ****-**** ****** **** *** the ******* ***** ******" ** ** to ** *******.

***, **** *** ******* **** ********, saying **** *** ****** ******* *** the ****** **** ** ** ** 22 *******.

****, ** ******, ** **** *** network *****, *** *** ***** ************ but ******* ******* ******** ******* ** **** **** for *** ******* ******. * ***** ****** ****** ***** it ******* *** *** ************.

Below ******* ***** ******

***** ****(**:**), **** ************ **** ***** ****** rate *** ***** *** ******* ******* and ************ *** **** ******** *************, ***** *** *********.

Price *******

**** ********* **** ****** ******** ******* saying ******* ***** ***** ******* ** 5-10% *** ****. **** *** *** disagree **** ****. ** ****, **** is ********** ***** **** ***** ****** than ***** *******.

Axis ******** ** ********* ****

**** *** ********** ***** '****** ******' that ********** ********* **** **** ** breed *** ****** ** **** *** 'best ********** **********' ****** **** *** * solution. *******, ** ************ **** *** small *******, *** ** *** ********* are ********** *** ***** **** **** was **** **** **** ***** **** Camera *********, ****, ***.

New ******** *** **** ***

*******, **** ********* ** *** ******* releases ********* ***** ********** ** * decelerating ******.

**** ****, *********** ***** **** *** product ******* *** **** ******** ** the **** *** (*.*.,*****,** ******,* ******, ***.).

****** **** ****** ******* ******** ***** hold ** *** *** ** *** end ******, *** ***** ******** ** their ******* *********** **** ** ***** low **** ** *** *** ***-** HD *******, ******** **** **** ********* in ********* *** ****** / *** end *********, ***** **** **** *** going ** ******** ** ****** ******** in *** ***** ****** ***** / mass ****** ******** **** **** ********** professed *** * *** ****** **** for ****.

Axis ** ********* *********

*** ****, ***:**** ** **** / **** **** Report ******* ** **** **********.

Comments (7)

The report also mentions that inventory levels at US distributors is up. I take this to mean increased sales to these distributors have not yet sold through at the same pace. I assume Axis recongnizes sales when they invoice the distributor.

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In Q1 2014, they said that inventory levels at US distributors declined. I am not sure if this is just a catch up for that.

Axis might argue that this is a bullish sign as it means that distributors are bullish about future sales accelerating. [Update: In the call, they mentioned that previous levels were low and that this increase is positive sign.]

I don't know. Since inventory levels declined and then increased so far, it will take the next 2 quarters to really get a good gauge of what is happening.

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Btw, Axis' share price jumped nearly 10% for the day (July 9, 2014). I am a little surprised as I don't see what fundamentally changed for the better in these results (i.e., it's in line with their past year plus performance pattern).

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Informative: 1
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Since the Chinese camera guys are encroaching into traditional Axis markets, what is Axis doing to try and penetrate the Chinese market?

Can they even compete there?

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It's a good question and Axis has provided us some feedback that we are putting together for a post next week.

If I had to guess though, Axis is targeting very high end projects inside China where advanced / niche feature sets that they are strong in can help them win. I find it hard to believe that Axis can compete for small systems in China.

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Btw, Axis gave a rule of thumb of 8 to 10 years for replacement of cameras, consistent with Lifespan of Video Surveillance Systems survey results.

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Funny

Axis CEO on Dropcam/Google deal: "focused on the consumer segment, selling everything online .... no direct effect from our perspective."

This is somewhat bizarre, considering consumer was/is clearly a key area for AVHS (and Dropcam was a former Axis partner).

Agree: 1
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