Aeroflex Holding Corp.
) reported its financial results for the second quarter of fiscal
2014 on February 7. Aeroflex recorded net income of $1.13 million
or 1 penny per share in the second quarter of fiscal 2014 versus
$745,000 or 1 penny per share in the year-ago quarter.
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Non-GAAP net income for the reported quarter was $9.25 million or
11 cents per share compared with $8.71 million or 10 cents per
share in the year-earlier quarter. The adjusted earnings for the
reported quarter comfortably beat the Zacks Consensus Estimate by
Revenues in the second quarter of fiscal 2014 were $151.1
million, which was in line with the Zacks Consensus Estimate.
However, on a year-over-year basis, revenues decreased marginally
from $151.9 million in second quarter fiscal 2013.
Gross margins were down 150 bps year over year to 49.6% in the
reported quarter. Non-GAAP operating income was $20.8 million
compared with $22.5 million in the year-ago quarter.
(AMS) were flat at $83.76 million, compared with $83.30 million
in the year-ago quarter. The segment's book-to-bill ratio was
above 1 for the quarter. AMS bookings were driven by two
significant contract wins for mixed-signal semiconductors in new
(ATS) decreased marginally to $67.35 million, down from $68.57
million in the year-ago quarter. The ATS wireless infrastructure
business continued to profit from demand for next generation LTE
(Long Term Evolution) technology in growing markets such as Asia,
which resulted in a record bookings quarter for TM500s. Moving
forward, increasing equipment spending by wireless
telecommunications carriers in Asia to develop fourth generation
networks will support higher demand for wireless test equipment
and revenues in the ATS segment.
Gross margins for AMS declined to 44.8% from 49.1% in the
year-earlier quarter. Gross margins for ATS improved to 55.6%
compared with 54.1% in the year-ago quarter.
Cash and cash equivalents as of Dec 31, 2013 were $60.95 million.
Long-term debt at year end was $587,000.
Cash flow from operating activities was $10.04 million for the
first six months of fiscal 2014 compared with $44.11 million in
the prior-year period. The sharp decrease was on account of
losses booked on disposal of operations, as well as payoffs
relating to accrued expenses and creditors.
For third quarter fiscal 2014, sales are expected in the range of
$155 million-$162 million. GAAP income from continuing operations
is expected to be between $4 million and $8 million and adjusted
EBITDA within $26 million and $30 million. On a per share basis,
GAAP earnings are expected to be between 4 cents and 7 cents and
non-GAAP earnings between 11 cents and 14 cents.
Just a day before the earnings release, Aeroflex announced the
acquisition of Shenick Network Systems, a leading provider of
virtual testing for next generation software-defined networking.
This acquisition is anticipated to aid in continued growth of
Aeroflex and help it in maintaining the leading market position
in wireless infrastructure test equipment. It is also expected to
enhance the company's gross margins and profitability while
expanding its market coverage. Aeroflex expects the acquisition
to be neutral to its fiscal 2014 results and accretive to its
fiscal 2015 financial results.
Share price rose 14.6% following the earnings announcement as the
earnings data turned out to be better than expected. In addition,
the acquisition of Shenick Network Systems might have also played
a part in the share price uptrend.
Aeroflex currently holds a Zacks Rank #3 (Hold). Other stocks in
the industry that look promising and are worth a look include
Alpha & Omega Semiconductor, Ltd.
Integrated Device Technology, Inc.
), each carrying a Zacks Rank #1 (Strong Buy).