Turtle Beach crushes second-quarter estimates as rise of Fortnite and PUBG boosts demand for headsets

Turtle Beach Corporation (NASDAQ:HEAR) announced better-than-expected second-quarter results as the rise of multiplayer online games spurred on demand for its audio headsets.

The audio accessory company reported earnings of US$0.40 per share on revenue of US$60.8mln compared with a net loss of US$0.57 on revenue of US$19.11mln in the previous year’s second quarter.

READ: Oppenheimer raises Turtle Beach price target on headset demand from video gaming space

The California-based company crushed Wall Street estimates of a net loss of US$0.02 EPS on revenue of $47.9mln.

Shares jumped nearly 18% to US$35.78 in Monday after-hours trading.

For the next quarter, the company expects earnings of US$0.44 per share on revenue of US$65mln, compared with a net loss of US$0.04 per share on revenue of US$36mln in the previous year’s third quarter.

The company upped its full-year guidance to earnings of US$1.95 per share on revenue of US$205mln, above its previous guidance of US$0.95 per share on revenue of US$205mln.

The rise in popularity of multiplayer games like Fortnite and PlayerUnknown’s Battlegrounds have been a driving force behind revenue growth.

“Our growth continues to be driven by a healthy console gaming headset market and our market share gains. The successes of Fortnite and PlayerUnknown’s Battlegrounds, and their innovative battle royale format, has driven new gamers into the market at significantly higher headset attach rates than we have experienced in the past,” said CEO Juergen Stark in a press release.

An analyst weighs in

Oppenheimer analysts described Turtle Beach as a “long-term growth” opportunity in a July research note.

“The company has many tailwinds in the video game space and we believe a premium multiple is warranted,” said analysts Andrew Uerkwitz and Martin Yang.

The analysts reiterated an Outperform rating, more than doubling the price target to US$31 from US$12.

The company recently signed a deal as the official esports and gaming headset partner for Manchester City eSports team. The team’s pro players will use Turtle Beach’s Elite Pro line of audio equipment and other accessories.

Story by ProactiveInvestors