EsDigital media player producer Roku reported 4Q 2018 revenues that climbed 46.1% year over year, which in turn was were 5.6%-points higher than expected according to S&P Global Market Intelligence figures. While much of the focus of the company’s report – and related 25% rise in the stock price according to CNBC – was on the user platform business the equipment-sales business, which accounts for 43.8% of sales, continued to expand.
Panjiva data indicates U.S. seaborne imports of the company’s media player jumped 304.3% in the three months to Nov. 30, the peak season for shipping ahead of holiday sales and possibly in response to the release of new equipment. Subsequently growth has continued with a 20.3% expansion in the three months to Jan. 30.
Source: Panjiva
Yet, the 4Q acceleration may have reflected concerns about the impact of tariffs sourcing of players. The company switched imports from Taiwan to China in late 2017 and now relies on China for 90.3% of imports in the 12 months to Jan. 31.
Should the U.S.-China trade talks fail, or at the minimum not remove existing tariffs, Roku may choose to work through existing inventories, raise prices or return production to Taiwan in response. For now though, as discussed in Panjiva research of Feb. 19, the direction of talks is tending towards a solution rather than otherwise.
Source: Panjiva
