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ARRIS (ARRS) Misses Earnings and Revenue Estimates in Q2
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ARRIS International plc reported decent second-quarter 2018 financial results with year-over-year increase in revenues and adjusted earnings, although it missed the respective estimates.
Net Income
GAAP net income for the reported quarter came in at $35.8 million or 19 cents per share compared with $30.3 million or 16 cents per share in the year-earlier quarter. The bottom line improvement was primarily led by strong performance in the Network & Cloud and Enterprise businesses.
Adjusted earnings for the quarter improved to 72 cents per share from 63 cents in the year-ago quarter. However, the figure missed the Zacks Consensus Estimate by 3 cents.
ARRIS International plc Price, Consensus and EPS Surprise
Quarterly GAAP revenues increased 4% year over year to $1,726.5 million with the addition of Ruckus and increased E6000 CCAP sales. The figure, however, lagged the Zacks Consensus Estimate of $1,772 million.
Quarter Details
Total operating expenses increased to $453.9 million from $347.7 million in the prior-year quarter. Adjusted gross profit was $505.9 million compared with $409.5 million in the prior-year quarter for respective margins of 29.2% and 24.6%. The improvement in margins was largely due to a favorable product mix and strong performance from high-margin Network & Cloud and Enterprise segments.
Total order backlog at the end of the reported quarter was $1,258 million compared with $1,326 million in the year-ago period. Additionally, book-to-bill ratio was 0.98 compared with 1.01 in the year-earlier quarter.
By segments, revenues from Network & Cloud were $549.5 million reflecting strong demand for HFC Access equipment — E6000 Gen2 hardware and Video Systems products.
Revenues from Customer Premises Equipment were $1,008.1 million with video set-top sales impacted by Pay TV market challenges.
Enterprise revenues were $172.2 million, driven by growing demand for GigaBit connectivity, cloud and managed service expansion.
Cash Flow & Balance Sheet
For the first six months of 2018, the company generated $199.3 million of cash from operations compared with $495.9 million in the year-ago period.
As of Jun 30, 2018, ARRIS had cash and cash equivalents of $501.4 million with long-term debt & financing lease obligations (net of current portion) of $2,074.4 million compared with respective tallies of $1,346 million and $2,134.5 million a year ago.
The company repurchased approximately 4 million ordinary shares for $100 million during the reported quarter.
Guidance
For the third quarter of 2018, ARRIS expects revenues in the range of $1,680-$1,730 million with GAAP EPS of 20-25 cents and adjusted EPS of 65-70 cents.
For 2018, the company expects revenues between $6,850 million and $7,000 million with GAAP EPS of 68-83 cents and adjusted EPS of $2.85-$3.
Arista has a long-term earnings growth expectation of 21.2%. It beat earnings estimates in each the trailing four quarters, the average being 25.5%.
Corning has a long-term earnings growth expectation of 8.2%. It beat earnings estimates in each the trailing four quarters, the average being 3.8%.
SeaChange has a long-term earnings growth expectation of 10%. It surpassed earnings estimates thrice in the trailing four quarters with an average positive surprise of 282.8%.
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ARRIS (ARRS) Misses Earnings and Revenue Estimates in Q2
ARRIS International plc reported decent second-quarter 2018 financial results with year-over-year increase in revenues and adjusted earnings, although it missed the respective estimates.
Net Income
GAAP net income for the reported quarter came in at $35.8 million or 19 cents per share compared with $30.3 million or 16 cents per share in the year-earlier quarter. The bottom line improvement was primarily led by strong performance in the Network & Cloud and Enterprise businesses.
Adjusted earnings for the quarter improved to 72 cents per share from 63 cents in the year-ago quarter. However, the figure missed the Zacks Consensus Estimate by 3 cents.
ARRIS International plc Price, Consensus and EPS Surprise
ARRIS International plc Price, Consensus and EPS Surprise | ARRIS International plc Quote
Revenues
Quarterly GAAP revenues increased 4% year over year to $1,726.5 million with the addition of Ruckus and increased E6000 CCAP sales. The figure, however, lagged the Zacks Consensus Estimate of $1,772 million.
Quarter Details
Total operating expenses increased to $453.9 million from $347.7 million in the prior-year quarter. Adjusted gross profit was $505.9 million compared with $409.5 million in the prior-year quarter for respective margins of 29.2% and 24.6%. The improvement in margins was largely due to a favorable product mix and strong performance from high-margin Network & Cloud and Enterprise segments.
Total order backlog at the end of the reported quarter was $1,258 million compared with $1,326 million in the year-ago period. Additionally, book-to-bill ratio was 0.98 compared with 1.01 in the year-earlier quarter.
By segments, revenues from Network & Cloud were $549.5 million reflecting strong demand for HFC Access equipment — E6000 Gen2 hardware and Video Systems products.
Revenues from Customer Premises Equipment were $1,008.1 million with video set-top sales impacted by Pay TV market challenges.
Enterprise revenues were $172.2 million, driven by growing demand for GigaBit connectivity, cloud and managed service expansion.
Cash Flow & Balance Sheet
For the first six months of 2018, the company generated $199.3 million of cash from operations compared with $495.9 million in the year-ago period.
As of Jun 30, 2018, ARRIS had cash and cash equivalents of $501.4 million with long-term debt & financing lease obligations (net of current portion) of $2,074.4 million compared with respective tallies of $1,346 million and $2,134.5 million a year ago.
The company repurchased approximately 4 million ordinary shares for $100 million during the reported quarter.
Guidance
For the third quarter of 2018, ARRIS expects revenues in the range of $1,680-$1,730 million with GAAP EPS of 20-25 cents and adjusted EPS of 65-70 cents.
For 2018, the company expects revenues between $6,850 million and $7,000 million with GAAP EPS of 68-83 cents and adjusted EPS of $2.85-$3.
Zacks Rank & Stocks to Consider
ARRIS currently has a Zacks Rank #3 (Hold). Better-ranked stocks in the industry include Arista Networks, Inc. (ANET - Free Report) , Corning Incorporated (GLW - Free Report) and SeaChange International, Inc. (SEAC - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Arista has a long-term earnings growth expectation of 21.2%. It beat earnings estimates in each the trailing four quarters, the average being 25.5%.
Corning has a long-term earnings growth expectation of 8.2%. It beat earnings estimates in each the trailing four quarters, the average being 3.8%.
SeaChange has a long-term earnings growth expectation of 10%. It surpassed earnings estimates thrice in the trailing four quarters with an average positive surprise of 282.8%.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>