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Why Is Viav Solutions (VIAV) Up 5.1% Since Last Earnings Report?
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A month has gone by since the last earnings report for Viav Solutions (VIAV - Free Report) . Shares have added about 5.1% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Viav Solutions due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Viavi's Q1 Earnings Beat Estimates, Revenues Down Y/Y
Viavi reported decent first-quarter fiscal 2021 results (ended Oct 3, 2020), wherein the top and the bottom lines beat the respective Zacks Consensus Estimate.
Net Income
On a GAAP basis, net income in the quarter was $14.3 million or 6 cents per share compared with $6.8 million or 3 cents per share in the year-ago quarter.
Non-GAAP net income came in at $48.3 million or 21 cents per share compared with $42.9 million or 18 cents per share in the prior-year quarter. The bottom line beat the Zacks Consensus Estimate by 4 cents.
Revenues
Quarterly total net revenues declined 5% year over year to $284.7 million. The top line, however, surpassed the consensus estimate of $283 million.
Segment-wise, revenues from NE (Network Enablement) fell 18.5% year over year to $162.1 million, primarily due to the pandemic-related declines in Field Instruments. SE (Service Enablement) revenues grew 2.4% to $21.4 million, driven by an increase in Assurance revenues.
NSE’s (Network and Service Enablement) gross margin was 64.2%, up 20 basis points (bps) year over year. Its operating margin of 7.2% decreased 290 bps due to lower revenues. This was above the midpoint of the company’s guidance of 5.5-7.5%.
OSP (Optical Security and Performance Products) revenues grew 26.5% year over year to $101.2 million. The improvement was driven by an increase in 3D Sensing, Anti-Counterfeiting and Aerospace & Defense products.
OSP’s gross margin of 60.3% expanded 620 bps year over year owing to higher volume and favorable manufacturing cost absorption. Operating margin of 46.7% improved 870 bps on higher gross margin and good cost control.
Region wise, Viavi generated 33.5% of total net revenues from the Americas, 38% from Asia-Pacific and 28.5% from EMEA.
Other Details
Overall, non-GAAP gross profit was $178.8 million with a margin of 62.8% compared with $183.9 million with a margin of 61.3% in the year-ago quarter. Non-GAAP operating income was $60.6 million compared with $52.7 million in the prior-year quarter with respective margins of 21.3% and 17.6%.
Cash Flow & Liquidity
In the first quarter of fiscal 2021, Viavi generated $63.9 million of cash from operations, up 104.2% year over year. As of Oct 3, 2020, the company had $590.8 million in cash and cash equivalents with $606.6 million of long-term debt compared with the respective tallies of $539 million and $600.9 million at the end of the previous quarter.
Q2 Fiscal 2021 Guidance
For the second quarter of fiscal 2021 (ending Jan 2, 2021), Viavi expects revenues in the range of $280-$300 million. Non-GAAP earnings are estimated in the band of 18-20 cents per share.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month. The consensus estimate has shifted 9.76% due to these changes.
VGM Scores
At this time, Viav Solutions has a nice Growth Score of B, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Viav Solutions has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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Why Is Viav Solutions (VIAV) Up 5.1% Since Last Earnings Report?
A month has gone by since the last earnings report for Viav Solutions (VIAV - Free Report) . Shares have added about 5.1% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Viav Solutions due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Viavi's Q1 Earnings Beat Estimates, Revenues Down Y/Y
Viavi reported decent first-quarter fiscal 2021 results (ended Oct 3, 2020), wherein the top and the bottom lines beat the respective Zacks Consensus Estimate.
Net Income
On a GAAP basis, net income in the quarter was $14.3 million or 6 cents per share compared with $6.8 million or 3 cents per share in the year-ago quarter.
Non-GAAP net income came in at $48.3 million or 21 cents per share compared with $42.9 million or 18 cents per share in the prior-year quarter. The bottom line beat the Zacks Consensus Estimate by 4 cents.
Revenues
Quarterly total net revenues declined 5% year over year to $284.7 million. The top line, however, surpassed the consensus estimate of $283 million.
Segment-wise, revenues from NE (Network Enablement) fell 18.5% year over year to $162.1 million, primarily due to the pandemic-related declines in Field Instruments. SE (Service Enablement) revenues grew 2.4% to $21.4 million, driven by an increase in Assurance revenues.
NSE’s (Network and Service Enablement) gross margin was 64.2%, up 20 basis points (bps) year over year. Its operating margin of 7.2% decreased 290 bps due to lower revenues. This was above the midpoint of the company’s guidance of 5.5-7.5%.
OSP (Optical Security and Performance Products) revenues grew 26.5% year over year to $101.2 million. The improvement was driven by an increase in 3D Sensing, Anti-Counterfeiting and Aerospace & Defense products.
OSP’s gross margin of 60.3% expanded 620 bps year over year owing to higher volume and favorable manufacturing cost absorption. Operating margin of 46.7% improved 870 bps on higher gross margin and good cost control.
Region wise, Viavi generated 33.5% of total net revenues from the Americas, 38% from Asia-Pacific and 28.5% from EMEA.
Other Details
Overall, non-GAAP gross profit was $178.8 million with a margin of 62.8% compared with $183.9 million with a margin of 61.3% in the year-ago quarter. Non-GAAP operating income was $60.6 million compared with $52.7 million in the prior-year quarter with respective margins of 21.3% and 17.6%.
Cash Flow & Liquidity
In the first quarter of fiscal 2021, Viavi generated $63.9 million of cash from operations, up 104.2% year over year. As of Oct 3, 2020, the company had $590.8 million in cash and cash equivalents with $606.6 million of long-term debt compared with the respective tallies of $539 million and $600.9 million at the end of the previous quarter.
Q2 Fiscal 2021 Guidance
For the second quarter of fiscal 2021 (ending Jan 2, 2021), Viavi expects revenues in the range of $280-$300 million. Non-GAAP earnings are estimated in the band of 18-20 cents per share.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month. The consensus estimate has shifted 9.76% due to these changes.
VGM Scores
At this time, Viav Solutions has a nice Growth Score of B, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Viav Solutions has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.