Ubiquiti Networks, Inc.
) reported strong first-quarter fiscal 2014 results with non-GAAP
net income of $41.2 million or 46 cents per share, well exceeding
the Zacks Consensus Estimate of 39 cents. In the prior-year
quarter, the company had reported adjusted net income of $13.6
million or 15 cents per share.
On a GAAP basis, the company's net income came in at $40.5
million, an increase of 206.8% from $13.2 million in the last
year; whereas earnings per share increased 221.4% to 45 cents
from 14 cents in the prior-year quarter.
Growth in the company's core business primarily drove the
earnings. Ubiquiti's persistent focus on expanding the services
by increasing investments in innovation and development was a key
driver for the growth. Management's executive abilities and the
opportunities in the enterprise business also contributed to the
Ubiquiti's total revenue surged 110.8% year over year and
28.2% sequentially to $129.7 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 $113 million by
Service Provider Technology
segment sales increased 82% year over year to $94.2 million
driven by strong performance in all its business including
airMAX, New platforms, Other systems, Embedded radio and
segment sales surged 257.7% year over year to $35.5 million
driven by significant sales increase in its New platforms
business. The Antennas and Other systems also performed well.
Income and Expenses
The company reported operating income of $45.9 million
compared with $15.8 million in the prior-year quarter. Gross
margins also increased to 44.7% from 40.7% in the prior-year
The company's research and development expenses were $6.3
million, up 34.1% year over year from $4.7 million, while sales,
general and administration expenses were $5.8 million versus $4.5
million in the prior-year quarter.
Balance Sheet and Cash Flow
Cash and cash equivalents were $279.7 million at the
quarter-end, compared with $227.8 million at the end of Jun 30,
2013. The company reported total equity of $190.9 million,
compared with $147.4 million at the end of the previous quarter.
The company's long-term debt reduced 1.7% sequentially to $69.9
The cash flow from operating activities for the quarter
aggregated $51.9 million.
Along with the earnings release, management provided guidance
for the second quarter of fiscal 2014. Revenues for the second
quarter of fiscal 2014 are expected to be in the range of $130
million to $136 million.
For the second quarter of fiscal 2014, the company expects
non-GAAP income per share to be between 42 cents and 46 cents,
while the GAAP earnings are expected to be between 40 cents and
Ubiquiti currently carries a Zacks Rank #2 (Buy). Some other
players within the sector that are worth mentioning include
), which carries a Zacks Rank #1 (Strong Buy), and
Novatel Wiresless, Inc
Motorola solutions, Inc.
), both of which carry a Zacks Rank #2 (Buy).
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