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iRobot margins indicate consumers embracing connected home products, analyst says

The company is defining what a smart home will look like, according to Lisa Chai of Robo Global, the creator of the ROBO Global Robotics & Automation Index
iRobot products
Demand for Roomba robot vacuums drove holiday sales, according to iRobot

If you’re wondering if robots are gaining traction, go no further than the latest financial results from iRobot Corp (NASDAQ:IRBT).

The Bedford, Massachusetts, company reported this week that its gross margin widened in 2018 to 51% from 49% a year earlier. Sales of the Roomba robotic vacuum models helped drive annual revenue above $1 billion for the first time.

“The company is defining what a smart home will look like as it expands upon its ecosystem of connected robots and technologies,” said Lisa Chai, senior research analyst at ROBO Global, the Dallas-based index, advisory and research company that created the ROBO Global Robotics & Automation Index.

READ: iRobot surges after reporting 4Q results that beat Wall Street estimates

iRobot rallied Thursday a day after reporting fourth-quarter results that beat Wall Street estimates.

For the three months ended December 29, it posted earnings per share of $0.88 on record revenue of $385 million. The average estimate of analysts was for earnings per share of $0.50 on an expected revenue of $381.26 million.

Demand for its Roomba i7 and i7+ robot vacuums drove holiday sales in the US, according to the company. Last month, it introduced the Terra robot mower.

For 2019, the company expects revenue of $1.28 billion-$1.31 billion, which would represent year-over-year growth of 17%-20%.

'Very excited'

"We are very excited about our 2018 performance and the opportunities that lie ahead,” Chairman and CEO Colin Angle said in a statement.

Shares of the company climbed 2.9% to $100.92 on Friday.

iRobot is a component of the ROBO Global Robotics & Automation Index, the world’s first benchmark index tracking global companies focusing on robotics, automation and artificial intelligence.

The ROBO Global Robotics & Automation Index ETF (NYSEARCA:ROBO) decreased 1.1% to $36.11 on Friday.

–This story has been updated to give the latest stock and index prices–

Contact Dennis Fitzgerald at [email protected]

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