Arris Beats, Outlook in Line - Analyst Blog
July 28 2011 - 4:30AM
Zacks
Yesterday, after the closing bell,
Arris Group Inc. (ARRS) declared solid financial
results for second-quarter 2011. Furthermore, the company’s ensuing
third-quarter 2011 financial outlook was in line with the Zacks
Consensus Estimates.
EPS
GAAP net income in the second
quarter of 2011 was $16.7 million or 13 cents per share compared
with a net income of $19.8 million or 15 cents per share in the
prior-year quarter. Adjusted (excluding special items) EPS, in the
reported quarter was 21 cents, miles ahead of the Zacks Consensus
Estimate of 15 cents.
Revenue
Quarterly total revenue of $265.8
million was down 5.2% year over year and also below the Zacks
Consensus Estimate of $271 million. Quarterly Domestic revenue was
68% and International revenue was 32%. Comcast
Corp. (CMCSA) and Time Warner Cable Inc.
(TWC) together constituted 35.7% of total second-quarter
revenue.
Margins
Quarterly gross margin came in at
40.2% compared with 40.4% in the year-ago quarter. Operating
income, in the second quarter of 2011, was $25.5 million compared
with $34.2 million in the prior-year quarter. Quarterly operating
margin was 9.6% compared with 12.2% in the year-ago quarter.
Cash Flow
Arris generated $31.4 million cash
from operation during the second quarter of 2011 compared with
$35.2 million in the prior-year quarter. Quarterly free cash flow
(cash flow from operation less capital expenditure) was $25.1
million compared with $29.6 million in the year-ago quarter.
Balance Sheet
At the end of the second quarter of
2011, Arris had $591.5 million of cash & marketable securities
on its balance sheet compared with $620.1 million at the end of
fiscal 2010. Total debt was $208.3 million at the end of the
reported quarter compared with $202.6 million at the end of fiscal
2010. At the end of the second quarter of 2011,
debt-to-capitalization ratio was 0.17 compared with 0.17 at the end
of fiscal 2010.
Order Backlog and
Book-to-Bill
Total order backlog of Arris, at
the end of the second quarter of 2011, was $154.2 million compared
with $174.1 million at the end of the prior-year quarter.
Book-to-bill ratio was 0.91 in the reported quarter compared with
0.92 in the prior-year quarter. In the previous quarter, Arris
repurchased approximately 5.1 million of its common outstanding
shares for a consideration of $57.6 million.
Broadband Communications
Systems Segment
Quarterly revenue was $201.8
million, down 7% year over year. Quarterly gross margin was 42.5%
compared with 42.7% in the year-ago quarter. The company achieved a
record high 79,000 C4 CMTS downstream shipment.
Access, Transport, &
Supplies Segment
Quarterly revenue was $46.9
million, down 3.1% year over year. Quarterly gross margin was 24.2%
compared with 27.2% in the year-ago quarter.
Media & Communication
System Segment
Quarterly revenue was $17.1
million, up 14.8% year over year. Quarterly gross margin was 57.1%
compared with 49.1% in the year-ago quarter.
Future Financial
outlook
Management’s guidance for net sales
in the third quarter of 2011 will be within the range of $270
million - $290 million. EPS, on a GAAP basis, are expected within
the range of 9 cents to 13 cents. EPS, on a non-GAAP basis, are
expected within the range of 19 cents to 23 cents. This
includes stock-based compensation expenses of 3 cents per
share.
Recommendation
We maintain our long-term Neutral
recommendation on Arris. Currently, it holds a short-term Zacks #3
Rank (Hold) on the stock.
ARRIS GROUP INC (ARRS): Free Stock Analysis Report
COMCAST CORP A (CMCSA): Free Stock Analysis Report
TIME WARNER CAB (TWC): Free Stock Analysis Report
Zacks Investment Research
ARRIS International plc (NASDAQ:ARRS)
Historical Stock Chart
From Jun 2024 to Jul 2024
ARRIS International plc (NASDAQ:ARRS)
Historical Stock Chart
From Jul 2023 to Jul 2024