Yesterday, after the closing bell,
Arris Group Inc.
) declared financial results for the fourth quarter of 2012,
which fell below the Zacks Consensus Estimates. However, the
company exited the third quarter with a strong order backlog.
Arris currently has a Zacks Rank #2 (Buy). The company has
decided to purchase the cable set top box business of Motorola
Mobility, a subsidiary of
). The deal is expected to get regulatory approval by the second
quarter of 2013.
GAAP net income in the fourth quarter of 2012 was $14.8
million or 13 cents per share compared with a net loss of $59.6
million or 51 cents per share in the prior-year quarter. However,
quarterly adjusted (excluding special items) earnings per share
came in at 22 cents, which fell below the Zacks Consensus
Estimate of 25 cents.
Quarterly total revenue was $344 million, up 22.4% year over
year but fell shy of the Zacks Consensus Estimate of $354
million. Quarterly Domestic revenue was 74.4% while International
revenue was 25.6%.
Time Warner Cable Inc.
) together constituted 51.7% of the total fourth-quarter revenue
Quarterly gross margin came in at 35.8% compared with 37.9% in
the year-ago quarter. Operating income, in reported
quarter, was $25.5 million compared with $25.2 million in the
prior-year quarter. Quarterly operating margin was 7.4% compared
with 9% in the year-ago quarter.
Total order backlog of Arris, at the end of fiscal 2012, was
$222.6 million compared with $148.5 million at the end of fiscal
2011. Book-to-bill ratio was 1.11 in the fourth quarter compared
with 0.98 in the prior-year quarter. Arris refrained from
repurchasing its own common stocks in the reported
Arris generated $11.8 million of cash from operations during
the fourth quarter of 2012 compared with $60.9 million in the
prior-year quarter. Quarterly free cash flow (cash flow from
operation-less capital expenditure) was $4.8 million compared
with $56.5 million in the year-ago quarter. At the end of fiscal
2012, Arris had $530.1 million of cash & marketable
securities on its balance sheet compared with $589.9 million at
the end of 2011. Total debt was $222.1 million at the end of
fiscal 2012 compared with $209.8 million at the end of 2011.
Broadband Communications Systems Segment
Quarterly revenue was $272.7 million, up 28.7% year over year.
Quarterly gross margin was 36.1% compared with 38.3% in the
year-ago quarter. Arris shipped 2.266 million CPE units, 87% of
which are DOCSIS 3.0. The company also shipped 105,246 C4 CMTS
downstream ports. The company's E6000 Cable Edge Router received
Access, Transport, & Supplies Segment
Quarterly revenue was $54.6 million, up 7.1% year over year.
Quarterly gross margin was 24.9%, compared with 25.9% year over
Media & Communication System Segment
Quarterly revenue was $16.7 million, down 7.7% year over year.
Quarterly gross margin was 66.1% compared with 67% in the
Management's guidance for net sales in the first quarter of
2013 will be within the range of $350 - $370 million. Earnings
per share, on a GAAP basis, are expected within the range of 2
cents to 6 cents. Earnings per share, on a non-GAAP basis, are
expected within the range of 22 cents to 26 cents. This
includes stock-based compensation expenses of 4 cents per
ARRIS GROUP INC (ARRS): Free Stock Analysis
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