iRobot Corporation IRBT reported better-than-expected results for third-quarter 2020, with earnings and sales surpassing estimates by 186.7% and 31.6%, respectively. Also, both bottom and top-line results improved from the year-ago quarter.The company reported earnings of $2.58 per share in the quarter, whereas the Zacks Consensus Estimate was pegged at 90 cents. Notably, the bottom line reflected an increase of 72% from $1.50 recorded in the third quarter of 2019. Healthy sales growth and improved margins aided the year-over-year rise in earnings.Revenue DetailsThe company generated revenues of $413.1 million in the quarter, surpassing the Zacks Consensus Estimate of $314 million. On a year-over-year basis, the quarterly revenues increased 42.8%, driven by healthy demand from retailers (on the upcoming holiday season, favorable sell-through trends and customer events) and growth in direct sales to consumers. Revenues derived from premium robots — products having $500 of more as list price — expanded 86% in the quarter.Notably, the demand for the company’s Roomba and Braava products was solid in the quarter. Also, response to the Genius Home Intelligence platform, and Roomba i3 and i3+ (launched in the third quarter) were remarkable.Total product units of 1,538 thousand shipped in the quarter reflected a year-over-year increase of 36%, while average selling prices grew by 2.3%. For vacuum products, revenues of $369 million reflected growth of 43.6% from the year-ago quarter. Units shipped were 1,354 thousand, up 38.9% from the year-ago quarter. Further, revenues from mopping products increased 37.5% to $44 million. Units shipped were 184 thousand, up from 156 thousand recorded in the third quarter of 2019.On a geographical basis, the company sourced 49.9% of revenues from domestic operations, the rest came from the international arena. Domestic revenues totaled $206.3 million, reflecting a 74.9% increase from the year-ago quarter. International revenues grew 20.6% to $206.9 million. International operations gained from a 12% increase in revenues in Japan and a 22% rise in EMEA sales.Margin ProfileIn the quarter under review, iRobot’s non-GAAP costs of revenues increased 43.3% year over year to $213.7 million, representing 51.7% of revenues compared with 51.5% in the year-ago quarter. Non-GAAP gross profit in the quarter grew 42.1% year over year to $199.4 million, while adjusted gross margin decreased 20 basis points (bps) to 48.3%.Research and development expenses were $38.6 million, up 15.6% year over year. This accounted for 9.4% of revenues compared with 11.5% in the year-ago quarter. Selling and marketing expenses increased 19.5% to $50.5 million. As a percentage of revenues, it reflected 12.2% in the quarter compared with 14.6% in the prior-year quarter. General and administrative expenses were $28.5 million, up 55.1% year over year. The figure mirrored 6.9% of the total revenue base compared with 6.4% in the year-earlier quarter.In the quarter, the company recorded adjusted operating earnings of $93.1 million, reflecting an increase of 86% from the year-ago quarter. Adjusted operating margin was 22.5%, higher than 17.3% in the year-ago quarter.Balance Sheet and Cash FlowExiting third-quarter 2020, iRobot had cash and cash equivalents of $297.2 million, increasing 28.8% from $230.7 million recorded at the end of the last reported quarter. Total long-term liabilities were $69.9 million, up 6.1% sequentially from $65.9 million.In the first three quarters of 2020, the company generated net cash of $96.8 million from its operating activities. However, it used net cash of $31.6 million for its operating activities in the first three quarters of 2019. Capital used for purchasing property and equipment totaled $25 million in the first nine months of 2020, down 7.6% year over year.During the first nine months of 2020, the company repurchased 0.7 million shares for $25 million consideration. Notably, no shares were repurchased in the second and third quarters of this year.OutlookiRobot anticipates benefiting from effective measures taken to deal with the pandemic-related woes, improving sell-through trend, exclusion of Roomba products from tariffs imposed under section 301 through Dec 31, 2020, and other growth opportunities in the quarters ahead.It anticipates revenues of $1.365-$1.375 billion for 2020, suggesting year-over-year growth of 12-13%. The expected growth rate is higher than 9-11% mentioned in February 2020.Non-GAAP gross profit is expected to be $613-$621 million (versus $510-$523 million stated earlier) and non-GAAP operating income is expected to be $125-$130 million (versus the previously mentioned $55-$75 million).Non-GAAP earnings per share are likely to be $3.43-$3.53 per share, higher than $1.70-$2.30 mentioned in February 2020.iRobot Corporation Price, Consensus and EPS Surprise iRobot Corporation price-consensus-eps-surprise-chart | iRobot Corporation QuoteZacks Rank & Stocks to ConsiderThe company currently has a market capitalization of $2.6 billion and a Zacks Rank #3 (Hold).Some better-ranked stocks in the Zacks Industrial Products sector are Kaman Corporation KAMN, Kennametal Inc. KMT and Lincoln Electric Holdings, Inc. LECO. While Kaman currently sports a Zacks Rank #1 (Strong Buy), both Kennametal and Lincoln Electric carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.In the past 60 days, earnings estimates for these stocks have improved for the current year. Further, earnings surprise for the last reported quarter was 71.43% for Kaman, 25% for Kennametal and 135.29% for Lincoln Electric.5 Stocks Set to DoubleEach was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor. Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Lincoln Electric Holdings, Inc. (LECO): Free Stock Analysis Report Kaman Corporation (KAMN): Free Stock Analysis Report Kennametal Inc. (KMT): Free Stock Analysis Report iRobot Corporation (IRBT): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research