We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Arista (ANET) Q3 Earnings & Revenues Top Estimates, Down Y/Y
Read MoreHide Full Article
Arista Networks, Inc. (ANET - Free Report) reported decent third-quarter 2020 results, wherein the top and the bottom lines beat the respective Zacks Consensus Estimate. However, both figures declined on a year-over-year basis.
Net Income
On a GAAP basis, net income in the September quarter declined to $168.4 million or $2.12 per share from $208.8 million or $2.59 per share in the prior-year quarter, primarily caused by lower operating income.
Non-GAAP net income came in at $192 million or $2.42 per share compared with $217.1 million or $2.69 per share in the year-ago quarter. The bottom line, however, beat the Zacks Consensus Estimate by 19 cents, delivering a positive surprise of 8.5%.
Arista Networks, Inc. Price, Consensus and EPS Surprise
Quarterly total revenues declined 7.5% year over year to $605.4 million (but surpassed the company’s guidance of $570-$590 million). This was due to extended lead times and shipment constraints resulting from the COVID-19 operating environment. The top line, however, surpassed the consensus estimate of $580 million.
Arista generated 75% of total revenues from the Americas and the remainder from international operations. Almost 37% of the vertical mix was driven by cloud titans, 37% from enterprise and financials, and 26% from cloud service providers. Product revenues declined to $480.2 million from $555.1 million year over year, while Service revenues grew to $125.2 million from $99.3 million supported by renewals and subscriptions.
Other Details
Non-GAAP gross profit contracted to $390.9 million from $421.2 million, with the respective margins of 64.6% and 64.4%. The non-GAAP gross margin was above the midpoint of the company’s guidance of 63-65%, reflecting the software and services mix.
Total operating expenses were $196.6 million compared with $188.7 million in the prior-year quarter. The company recognized incremental COVID-19-related costs, including elevated freight and component costs. Non-GAAP operating income declined to $231.5 million from $258.2 million in the year-ago quarter with a margin of 38.2% and 39.4%, respectively.
Cash Flow & Liquidity
In the first nine months of 2020, Arista generated $548.2 million of net cash from operating activities compared with $635.9 million in the prior-year period. As of Sep 30, the cloud networking company had $970.3 million in cash and cash equivalents with $247.7 million of non-current deferred tax liabilities.
Q4 Outlook
For the fourth quarter of 2020, Arista expects revenues of $615-$635 million. It anticipates a non-GAAP gross margin of 63-65% and a non-GAAP operating margin of around 37%.
Turtle Beach delivered a trailing four-quarter positive earnings surprise of 41%, on average.
Corning delivered a trailing four-quarter positive earnings surprise of 40.7%, on average.
Viavi delivered a trailing four-quarter positive earnings surprise of 17.5%, on average.
Legal Marijuana: An Investor’s Dream
Imagine getting in early on a young industry primed to skyrocket from $17.7 billion in 2019 to an expected $73.6 billion by 2027.
Although marijuana stocks did better as the pandemic took hold than the market as a whole, they’ve been pushed down. This is exactly the right time to get in on selected strong companies at a fraction of their value before COVID struck. Zacks’ Special Report, Marijuana Moneymakers, reveals 10 exciting tickers for urgent consideration.
Image: Bigstock
Arista (ANET) Q3 Earnings & Revenues Top Estimates, Down Y/Y
Arista Networks, Inc. (ANET - Free Report) reported decent third-quarter 2020 results, wherein the top and the bottom lines beat the respective Zacks Consensus Estimate. However, both figures declined on a year-over-year basis.
Net Income
On a GAAP basis, net income in the September quarter declined to $168.4 million or $2.12 per share from $208.8 million or $2.59 per share in the prior-year quarter, primarily caused by lower operating income.
Non-GAAP net income came in at $192 million or $2.42 per share compared with $217.1 million or $2.69 per share in the year-ago quarter. The bottom line, however, beat the Zacks Consensus Estimate by 19 cents, delivering a positive surprise of 8.5%.
Arista Networks, Inc. Price, Consensus and EPS Surprise
Arista Networks, Inc. price-consensus-eps-surprise-chart | Arista Networks, Inc. Quote
Revenues
Quarterly total revenues declined 7.5% year over year to $605.4 million (but surpassed the company’s guidance of $570-$590 million). This was due to extended lead times and shipment constraints resulting from the COVID-19 operating environment. The top line, however, surpassed the consensus estimate of $580 million.
Arista generated 75% of total revenues from the Americas and the remainder from international operations. Almost 37% of the vertical mix was driven by cloud titans, 37% from enterprise and financials, and 26% from cloud service providers. Product revenues declined to $480.2 million from $555.1 million year over year, while Service revenues grew to $125.2 million from $99.3 million supported by renewals and subscriptions.
Other Details
Non-GAAP gross profit contracted to $390.9 million from $421.2 million, with the respective margins of 64.6% and 64.4%. The non-GAAP gross margin was above the midpoint of the company’s guidance of 63-65%, reflecting the software and services mix.
Total operating expenses were $196.6 million compared with $188.7 million in the prior-year quarter. The company recognized incremental COVID-19-related costs, including elevated freight and component costs. Non-GAAP operating income declined to $231.5 million from $258.2 million in the year-ago quarter with a margin of 38.2% and 39.4%, respectively.
Cash Flow & Liquidity
In the first nine months of 2020, Arista generated $548.2 million of net cash from operating activities compared with $635.9 million in the prior-year period. As of Sep 30, the cloud networking company had $970.3 million in cash and cash equivalents with $247.7 million of non-current deferred tax liabilities.
Q4 Outlook
For the fourth quarter of 2020, Arista expects revenues of $615-$635 million. It anticipates a non-GAAP gross margin of 63-65% and a non-GAAP operating margin of around 37%.
Zacks Rank & Stocks to Consider
Arista currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the industry are Turtle Beach Corporation (HEAR - Free Report) , Corning Incorporated (GLW - Free Report) and Viavi Solutions Inc. (VIAV - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Turtle Beach delivered a trailing four-quarter positive earnings surprise of 41%, on average.
Corning delivered a trailing four-quarter positive earnings surprise of 40.7%, on average.
Viavi delivered a trailing four-quarter positive earnings surprise of 17.5%, on average.
Legal Marijuana: An Investor’s Dream
Imagine getting in early on a young industry primed to skyrocket from $17.7 billion in 2019 to an expected $73.6 billion by 2027.
Although marijuana stocks did better as the pandemic took hold than the market as a whole, they’ve been pushed down. This is exactly the right time to get in on selected strong companies at a fraction of their value before COVID struck. Zacks’ Special Report, Marijuana Moneymakers, reveals 10 exciting tickers for urgent consideration.
Download Marijuana Moneymakers FREE >>