FTDR - Frontdoor stock flies higher on surprise profit

Frontdoor ( NASDAQ: FTDR ) shares rose over 20% on Thursday after smashing Q4 earnings expectations and forecasting further margin expansion ahead.

For the fourth quarter, the Memphis-based home repair provider posted $0.13 in earnings per share, surprising the Street that had forecast a $0.11 per share loss. A report of $339M in revenue also rose above expectations by $5.74M.

“Our fourth quarter financial results were better than expected as inflation moderated,” CFO  Jessica Ross said. “However, our full-year 2022 financial results were significantly impacted by rapidly rising inflation and a continued decline in our Real Estate channel sales, driven by the tight market conditions. Our full year 2023 outlook reflects ongoing sales pressure in our go-to-market home service plan channels as well as increased SG&A attributed to the launch of our Frontdoor brand.”

She added that “aggressive pricing and improvement initiatives” taken in 2022 should help support continued margin expansion despite persistent inflationary pressure. The company sees 2023 gross profit margin 43% to 45%, expanding from 43% in 2022.

Management expects full-year revenue to range from $1.7B to $1.74B against a $1.73B consensus estimate. The company offered an adjusted EBITDA forecast of $220M to $240M against a $227.3M consensus.

Shares of Frontdoor ( FTDR ) surged 13.12% after moderating gains during Thursday’s trading.

Read more on the details of the quarter .

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