Arris 1Q Earnings Underperform - Analyst Blog

By
A A A

Yesterday, after the closing bell, Arris Group Inc. ( ARRS ) declared its financial results for the first quarter of 2013, which fell below the Zacks Consensus Estimates. As a result, in the after market trade on NASDAQ, the stock price of Arris was down 33 cents (0.84%) to $18.31.

However, the company exited the third quarter with a strong order backlog. Arris currently has a Zacks Rank #3 (Hold). The company recently acquired the cable set-top box business of Motorola Mobility, a subsidiary of Google Inc. ( GOOG ).

GAAP net loss in the second quarter of 2013 was $14.7 million or a loss of 13 cents per share compared with a net income of $5.8 million or 5 cents per share in the prior-year quarter. However, quarterly adjusted (excluding special items) earnings per share came in at 17 cents, which fell below the Zacks Consensus Estimate of 21 cents.

Quarterly total revenue was $353.7 million, up 16.8% year over year but missed the Zacks Consensus Estimate of $358 million. Quarterly Domestic revenue was 68.3% while International revenue was 31.7%. Comcast Corp. ( CMCSA ) and Time Warner Cable Inc. ( TWC ) together constituted 43% of the total first-quarter revenue of Arris.

Quarterly gross margin came in at 30.7% compared with 36% in the year-ago quarter.  Operating income, in the reported quarter, was $9.5 million compared with $11.7 million in the prior-year quarter. Quarterly operating margin was 2.7% compared with 3.9% in the year-ago quarter.

Total order backlog of Arris, at the end of the reported quarter, was $282.1 million compared with $277.7 million at the end of the year-ago quarter. Book-to-bill ratio was 1.17 in the last quarter compared with 1.43 in the prior-year quarter.

Arris generated $50.1 million of cash from operations during the first quarter of 2013 compared with $35.3 million in the prior-year quarter. Quarterly free cash flow (cash flow from operation-less capital expenditure) was $43.8 million compared with $31.5 million in the year-ago quarter. At the end of the reported quarter, Arris had $608.4 million of cash & marketable securities on its balance sheet compared with $530.1 million at the end of 2012. Total debt was $225.4 million at the end of the reported quarter compared with $222.1 million at the end of 2012.

Broadband Communications Systems Segment

Quarterly revenue was $288.3 million, up 17.9% year over year. Quarterly gross margin was 31.6% compared with 36.6% in the year-ago quarter. Arris shipped a record-high 2.864 million CPE units, 92% of which are DOCSIS 3.0. The company also shipped a record-high 122,700 C4 CMTS downstream ports. The company's E6000 Cable Edge Router gained market traction.

Access, Transport, & Supplies Segment

Quarterly revenue was $52.3 million, up 18.6% year over year. Quarterly gross margin was 20.7%, compared with 24.1% year over year.

Media & Communication System Segment

Quarterly revenue was $13 million, down 9.1% year over year. Quarterly gross margin was 50.5% compared with 60.8% in the year-ago quarter.



ARRIS GROUP INC (ARRS): Free Stock Analysis Report

COMCAST CORP A (CMCSA): Free Stock Analysis Report

GOOGLE INC-CL A (GOOG): Free Stock Analysis Report

TIME WARNER CAB (TWC): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Earnings , Stocks

Referenced Stocks: ARRS , CMCSA , GOOG , TWC

Zacks.com

Zacks.com

More from Zacks.com:

Related Videos

Stocks

Referenced

Most Active by Volume

27,668,672
  • $16.06 ▲ 0.31%
25,764,399
  • $19.59 ▲ 2.46%
24,810,780
  • $102.46 ▲ 0.21%
20,687,049
  • $49.7075 ▲ 0.56%
17,807,104
  • $34.88 ▲ 0.66%
16,836,434
  • $3.62 ▲ 0.56%
16,610,479
  • $13.10 ▼ 0.08%
16,409,241
  • $53.51 ▲ 18.15%
As of 8/29/2014, 02:07 PM

Find a Credit Card

Select a credit card product by:
Select an offer:
Search
Data Provided by BankRate.com