ARRIS International plc reported mixed third-quarter 2018 financial results, wherein the bottom line beat the Zacks Consensus Estimate but the top line missed the same.
GAAP net income for the reported quarter came in at $47.1 million or 26 cents per share compared with $88.3 million or 47 cents per share in the year-earlier quarter. The decline was primarily attributable to a fall in the revenues.
Adjusted earnings for the quarter came in at 68 cents per share compared with 80 cents in the year-ago quarter. However, the figure surpassed the Zacks Consensus Estimate of 66 cents.
Quarterly GAAP revenues decreased 4.5% year over year to $1,651.2 million. Also, the figure, lagged the Zacks Consensus Estimate of $1,710 million.
Total operating expenses increased to $412.2 million from about $347 million in the prior-year quarter. Adjusted gross profit was $471.2 million compared with $438.1 million in the prior-year quarter for respective margins of 28.5% and 25.3%.
By segments, revenues from Network & Cloud fell 4.5% to $532 million in the third quarter, primarily due to decline in CMTS product sales.
Revenues from Customer Premises Equipment declined 19.9% to $941.5 million. The fall was primarily attributable to lower video sales, decline in cable and telco demand in the United States.
Enterprise revenues in the quarter came in at $180.2 million. Notably, the revenues were negatively impacted by an adjustment in estimated channel rebates of about $9 million.
Cash Flow & Balance Sheet
For the first nine months of 2018, the company generated $420.2 million of cash from operations compared with $611.7 million in the year-ago period.
As of Sep 30, 2018, ARRIS had cash and cash equivalents of $480.8 million with long-term debt & financing lease obligations (net of current portion) of $2,053.4 million compared with respective tallies of $1,379.8 million and $2,112.5 million a year ago.
Year to date, the company has repurchased approximately 13.9 million ordinary shares for $353 million.
Zacks Rank & Stocks to Consider
ARRIS currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the space are Arista Networks, Inc. (ANET - Free Report) , Corning Incorporated (GLW - Free Report) and Knowles Corporation (KN - Free Report) . All these companies carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Arista Networks surpassed estimates in each of the trailing four quarters, the average beat being 13.35%.
Corning exceeded estimates in each of the trailing four quarters, the average beat being 4.14%.
Knowles surpassed estimates thrice in the trailing four quarters, the average beat being 11.04%.
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