On Jul 4, 2014, we issued an updated research report on
Arris Enterprises Inc.
). Strong demand for home gateways, large contract wins, coupled
with the acquisition of the cable set-top box business of Motorola
Mobility has transformed the company into an integrated equipment
supplier in the high-speed video and Internet delivery market.
Banking on these positives, the company raised its guidance for the
second quarter of 2014.
Arris has delivered positive earnings surprises in the last four
quarters, with an average beat of 49.05%. The company reported
strong first-quarter 2014 financial results with both the top and
the bottom line surpassing the Zacks Consensus Estimate.
Recently, Arris acquired Ontario-based SeaWell Networks, a leading
developer of adaptive bit rate (ABR) streaming technologies.
SeaWell boasts a powerful portfolio consisting of IP video,
multiscreen video, and ad insertion solutions. Arris expects this
acquisition to enhance its offerings through accelerated delivery
of the personalized TV and advertising solutions, streamlined video
distribution across various devices and minimization of costs of
multiple IP streaming platforms for various devices.
Moreover, with Motorola Mobility's Cable Home business in its
kitty, Arris is likely to become a formidable player in the video
infrastructure and customer premises equipment for the cable TV
industry, thus, safeguarding its position against large video
infrastructure gear manufacturing companies like
Cisco Systems, Inc.
In first-quarter 2014, the company generated a whopping 246%
year-over-year growth in revenues with both the Network and Cloud
and CPE segments achieving 84.4% and 378.1% year-over-year
improvement, respectively. Arris also entered into a deal with an
Austrian cable operator, Liwest Kabelmedien GmbH, for the
deployment of its Converged Cable Access Platform (CCAP) equipment.
Liwest will utilize Arris' E6000 converged edge router (CER) to
offer Internet services with speeds of up to 250 Mbps.
Earlier, Arris had struck a deal with Germany's major cable
operator, Unitymedia Gmbh, to deploy its Converged Cable Access
Platform (CCAP) equipment. Unitymedia has 6.6 million video, 2.6
million broadband, and 2.5 fixed-line telephony subscribers
covering 12.6 million homes. Thus, the deal will certainly boost
Arris' top line while moving ahead.
Arris currently carries a Zacks Rank #3 (Hold).
Stocks That Warrant a Look
Other stocks worth considering in this sector include
). Both Equinix and BlackBerry have a Zacks Rank #2 (Buy).
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