Yesterday, after the closing bell,
Arris Enterprises Inc.
) declared strong financial results for the third quarter of
2013, significantly beating the Zacks Consensus Estimate. As a
result, in the aftermarket trade on Nasdaq, the stock price of
Arris was up by 51 cents (3.09%) to $17. Arris currently has a
Zacks Rank #3 (Hold).
GAAP net income in the third quarter of 2013 was $18 million
or 13 cents per share compared with $17.9 million or 15 cents per
share in the prior-year quarter. However, quarterly adjusted
(excluding special items) earnings per share came in at 36 cents,
significantly above the Zacks Consensus Estimate of 28 cents.
Quarterly total revenue was $1,067.8 million, up 198.7% year
over year and almost in line with the Zacks Consensus Estimate of
$1,067 million. Quarterly Domestic revenues were 68.5% while
International revenues were 31.5%.
Time Warner Cable Inc.
Verizon Communications Inc.
) together constituted 38.2% of the total third-quarter 2013
Quarterly gross margin came in at 29.7% compared with 31.3% in
the year-ago quarter. Operating income, in the reported quarter,
was $12 million, down 48.2% from the prior-year quarter.
Quarterly operating margin was 1.1% compared with 6.5% in the
Total order backlog of Arris, at the end of the reported
quarter, was $523.7 million compared with $185.8 million at the
end of the year-ago quarter. The book-to-bill ratio was 0.99 in
the last quarter compared with 0.82 in the prior-year
Arris generated $28.1 million of cash from operations during
the third quarter of 2013 compared with $6.7 million in the
prior-year quarter. Quarterly free cash flow was $2 million as
against $1.5 million in the year-ago quarter.
At the end of the third quarter, Arris had $666.5 million of
cash & marketable securities on its balance sheet compared
with $530.1 million at the end of 2012. Total debt was $2,116.3
million as against $222.1 million at the end of 2012. The
debt-to-capitalization ratio, at the end of the reported quarter,
Network and Cloud Segment
The segment generated $748.9 million of revenues, a whopping
328.2% improvement from the year-ago quarter. The company
witnessed solid E6000 router demand, reaching the figure to over
1 million subscribers.
The segment recorded revenues of $320.5 million, a 75.5% hike
from the prior-year quarter. The company witnessed solid DOCSIS
shipments of which 89% were of DOCSIS 3.0 and 60% were of
Wi-Fi-enabled gateway devices.
Management expects fourth-quarter 2013 total revenue of
$1,150-$1,180 million. Its mid-point of $1,165 million is
substantially above the current Zacks Consensus Estimate of
GAAP earnings per share will likely range from breakeven to 4
cents. Non-GAAP earnings per share are projected in the band of
42-46 cents. Including 5 cents per share of stock-based
compensation expenses, the mid-point of non-GAAP earnings per
share of 39 cents is a penny higher than the current Zacks
ARRIS GROUP INC (ARRS): Free Stock Analysis
COMCAST CORP A (CMCSA): Free Stock Analysis
TIME WARNER CAB (TWC): Free Stock Analysis
VERIZON COMM (VZ): Free Stock Analysis Report
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