Ubiquiti Networks Beats Q1 Earnings on Strong Execution - Analyst Blog

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Ubiquiti Networks Inc . ( UBNT ) reported impressive fourth-quarter and fiscal 2014 results. For the fourth quarter, the company reported earnings of 56 cents a share which was 12% above the Zacks Consensus Estimate of 50 cents a share. Meanwhile, quarterly earnings were up 69.7% year over year from 33 cents reported in the prior-year quarter. 

Profits for the quarter were primarily driven by strong technological execution and strategic product launches.

Revenues for the quarter totaled $156.0 million, exhibiting a robust 54% rise from $101.2 million in the year-earlier quarter. On sequential basis as well, revenues were up from $148.3 million. Revenues also surpassed the Zacks Consensus Estimate of $148. Revenue growth was supported by strong performance across both the company's segments.

Segment Revenue

Revenues in the Service Provider Technology segment grew 37.6% year over year to $124 million while on a sequential basis revenues spiked 2.5%.

Enterprise Technology revenues for the quarter scaled 188.3% year over year to $32 million. On a sequential basis revenues rose 17.2%.

Margins

Gross profit for the quarter grew year over year to $68.9 million while gross margin improved 30 basis points (bps) to 44.2%. Operating margin rose 104 bps to 33.9% in the fourth quarter. 

Cash and Balance Sheet

Net cash flow from operations for the fourth quarter was $55.8 million compared with $46.2 million in the fourth quarter of fiscal 2013. The upside was driven by improvement in the lead times to customers and a reduction in inventory. Cash and cash equivalents as of Jun 30, 2014 were $347.1 million as against $227.8 million as of Jun 30, 2013.

Outlook

Following its fourth-quarter earnings release, the company provided guidance for the first quarter of 2015. Revenues for the first quarter are expected in the range of $156 million to 161 million while non-GAAP earnings are expected in the band of 52 cents to 54 cents a share.

Other Stocks to Consider

Ubiquiti currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the industry include DragonWave Inc ( DRWI ), Ericsson ( ERIC ) and ZTE Corp. ( ZTCOY ).


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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: ERIC , UBNT , DRWI , ZTCOY

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