Ubiquiti Networks, Inc.
) reported strong second-quarter fiscal 2014 results with
non-GAAP earnings of 48 cents per share, exceeding the Zacks
Consensus Estimate of 44 cents and the prior-year quarter
earnings of 2 cents. The company reported non-GAAP net income of
$42.6 million compared with $18.3 million in the year-ago
quarter, reflecting an increase of 132.5%.
On a GAAP basis, Ubiquiti's net income came in at $41.8
million, an increase of 135% year over year; whereas earnings per
share rose to 46 cents from 20 cents in the prior-year
Growth in the company's core business primarily drove the
earnings. Ubiquiti's consistent focus on expanding services by
increasing investments in innovation and development was a key
growth driver. Management's executive abilities and the
opportunities in the enterprise business also contributed to the
Ubiquiti's total revenue surged 84.8% year over year and 6.7%
sequentially to $138.4 million. The growth was driven by
increased transaction volumes and addition of new services for
existing customers. Additionally, strong performances from the
Enterprise Technology segment contributed to top-line growth.
Revenues beat the Zacks Consensus Estimate of $132 million by
Service Provider Technology
segment's sales increased 63.5% year over year to $111.4 million
driven by strong performance in all its business including
airMAX, airFiber and EdgeMAX businesses.
segment's sales reflected a phenomenal increase of 301.0% year
over year, reaching the figure to $27.0 million. The improvement
was driven by a significant sales increase in its UniFi platform
Income and Expenses
The company reported operating income of $47.1 million
compared with $20.1 million in the prior-year quarter. Gross
margins also increased to 44.7% from 40.7% in the year-earlier
The company's research and development expenses were $8.1
million, up 59.9% year over year from $5.0 million, while sales,
general and administration expenses stood at $5.8 million versus
$5.3 million in the prior-year quarter.
Balance Sheet and Cash Flow
Cash and cash equivalents were $305.5 million at quarter-end
compared with $227.8 million at the end of Jun 30, 2013. The
company reported total equity of $235.0 million against $147.4
million at the end of Jun 30, 2013. The company's long-term debt
fell 4.4% in the last six months to $71.1 million.
The cash flow from operating activities for the quarter
aggregated $27.6 million.
Along with the earnings release, management provided guidance
for the third quarter of fiscal 2014. Revenues for the third
quarter of fiscal 2014 are expected to be in the range of
The company expects non-GAAP income per share to be between 47
cents and 51 cents, while the GAAP earnings are expected to lie
in the 46-50 cents band.
Last month, the company launched Ubiquiti World Network (UWN),
a wireless Internet platform for the public and also signed a
distribution agreement with
Ingram Micro Inc
) for augmenting the company's marketing efforts in the U.S.
UWN is a consortium of independent Internet service providers
(ISP) across the globe. It was designed to provide the ISPs with
a unified platform to foster growth and innovation in the
wireless industry while catering to consumer's needs.
Ingram Micro is a leading technology distributor with its
network spanning the globe. Ingram will be responsible for
expanding the market for Ubiquiti while also enhancing its
presence in the existing markets.
Other Stocks to Consider
Ubiquiti currently carries a Zacks Rank #3 (Hold). Some
better-ranked stocks operating in the same sector worth reckoning
) which carries a Zacks Rank #1 (Strong Buy) and
) having a Zacks Rank #2 (Buy).
INGRAM MICRO (IM): Free Stock Analysis Report
NOKIA CP-ADR A (NOK): Free Stock Analysis
SHORETEL INC (SHOR): Free Stock Analysis
UBIQUITI NETWRK (UBNT): Free Stock Analysis
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