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Ubiquiti (UBNT) Q1 Earnings Beat Estimates on Revenue Growth
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Ubiquiti Networks, Inc. reported healthy first-quarter fiscal 2019 results, wherein both the bottom line and the top line surpassed the respective Zacks Consensus Estimate.
Net Income
On a GAAP basis, net income for the fiscal first quarter was $85.7 million or $1.16 per share compared with $74.9 million or 92 cents per share in the prior-year quarter primarily due to higher revenues.
Non-GAAP net income came in at $86.2 million or $1.17 per share compared with $74.9 million or 92 cents per share a year ago. The bottom line beat the Zacks Consensus Estimate by 24 cents.
Ubiquiti Networks, Inc. Price, Consensus and EPS Surprise
Quarterly revenues increased 15.1% year over year to $282.9 million primarily driven by higher sales at Enterprise Technology business. The top line surpassed the Zacks Consensus Estimate of $252 million.
By product type, revenues from Service Provider Technology were $105 million compared with $119.9 million in the year-ago quarter. Enterprise Technology revenues were $177.9 million compared with $126 million a year ago.
Other Quarter Details
Gross profit increased to $131.6 million from $111.7 million in the year-ago quarter on the back of top-line growth. Gross margin improved to 46.5% from 45.4%. Ubiquiti expects to incur costs due to tariffs imposed on certain Chinese products imported into the United States and thus anticipates near-term gross margin between 42% and 45%.
Total operating expenses were $32 million compared with $24.6 million in the year-earlier quarter. Despite the year-over-year increase in operating expenses, operating income improved to $99.6 million from $87.1 million owing to higher revenues.
Geographically, revenues from North America were $119.4 million compared with $96.2 million a year ago. Revenues from Europe, the Middle East and Africa were $124.9 million, up from $93.3 million. Revenues from Asia Pacific were $24.4 million compared with $25.3 million in the prior-year quarter. Revenues from South America were $14.2 million, down from $31.1 million.
Cash Flow and Liquidity
During the first quarter of fiscal 2019, Ubiquiti generated $93.9 million of cash from operating activities compared with $96.9 million in the year-ago quarter. As of Sep 30, 2018, the company had $480.8 million of cash and cash equivalents with long-term debt of $454.3 million.
Ubiquiti repurchased 1,238,163 shares for $112.8 million at an average price of $91.07 per share during the reported quarter.
Fiscal 2019 Outlook
Ubiquiti has reiterated its earlier guidance for full fiscal 2019 based on the recent demand environment in its end markets. The company expects to generate revenues between $1.1 billion and $1.2 billion and earnings per share (EPS) of $4.00-$4.80 in fiscal 2019. Also, due to the probable impact of the tariffs imposed for certain products imported into the United States from China, the low-end of EPS may decline to $3.65 or lower. The company anticipates to mitigate the effect of the tariffs in the long-term and expects long-term gross margin between 45% to 50%.
Zacks Rank and Stocks to Consider
Ubiquiti currently has a Zacks Rank #3 (Hold). Better-ranked stocks in the industry include Comtech Telecommunications Corp. (CMTL - Free Report) , Ribbon Communications Inc. (RBBN - Free Report) and Juniper Networks, Inc. (JNPR - Free Report) . While Comtech and Ribbon sport a Zacks Rank #1 (Strong Buy), Juniper carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Comtech has a long-term earnings growth expectation of 5%. It beat earnings estimates in each of the trailing four quarters, the average positive surprise being 136%.
Ribbon has a long-term earnings growth expectation of 12%. It beat earnings estimates in each of the trailing four quarters, the average positive surprise being 180.2%.
Juniper has a long-term earnings growth expectation of 5.3%. It beat earnings estimates in each of the trailing four quarters, the average positive surprise being 11%.
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Ubiquiti (UBNT) Q1 Earnings Beat Estimates on Revenue Growth
Ubiquiti Networks, Inc. reported healthy first-quarter fiscal 2019 results, wherein both the bottom line and the top line surpassed the respective Zacks Consensus Estimate.
Net Income
On a GAAP basis, net income for the fiscal first quarter was $85.7 million or $1.16 per share compared with $74.9 million or 92 cents per share in the prior-year quarter primarily due to higher revenues.
Non-GAAP net income came in at $86.2 million or $1.17 per share compared with $74.9 million or 92 cents per share a year ago. The bottom line beat the Zacks Consensus Estimate by 24 cents.
Ubiquiti Networks, Inc. Price, Consensus and EPS Surprise
Ubiquiti Networks, Inc. Price, Consensus and EPS Surprise | Ubiquiti Networks, Inc. Quote
Revenues
Quarterly revenues increased 15.1% year over year to $282.9 million primarily driven by higher sales at Enterprise Technology business. The top line surpassed the Zacks Consensus Estimate of $252 million.
By product type, revenues from Service Provider Technology were $105 million compared with $119.9 million in the year-ago quarter. Enterprise Technology revenues were $177.9 million compared with $126 million a year ago.
Other Quarter Details
Gross profit increased to $131.6 million from $111.7 million in the year-ago quarter on the back of top-line growth. Gross margin improved to 46.5% from 45.4%. Ubiquiti expects to incur costs due to tariffs imposed on certain Chinese products imported into the United States and thus anticipates near-term gross margin between 42% and 45%.
Total operating expenses were $32 million compared with $24.6 million in the year-earlier quarter. Despite the year-over-year increase in operating expenses, operating income improved to $99.6 million from $87.1 million owing to higher revenues.
Geographically, revenues from North America were $119.4 million compared with $96.2 million a year ago. Revenues from Europe, the Middle East and Africa were $124.9 million, up from $93.3 million. Revenues from Asia Pacific were $24.4 million compared with $25.3 million in the prior-year quarter. Revenues from South America were $14.2 million, down from $31.1 million.
Cash Flow and Liquidity
During the first quarter of fiscal 2019, Ubiquiti generated $93.9 million of cash from operating activities compared with $96.9 million in the year-ago quarter. As of Sep 30, 2018, the company had $480.8 million of cash and cash equivalents with long-term debt of $454.3 million.
Ubiquiti repurchased 1,238,163 shares for $112.8 million at an average price of $91.07 per share during the reported quarter.
Fiscal 2019 Outlook
Ubiquiti has reiterated its earlier guidance for full fiscal 2019 based on the recent demand environment in its end markets. The company expects to generate revenues between $1.1 billion and $1.2 billion and earnings per share (EPS) of $4.00-$4.80 in fiscal 2019. Also, due to the probable impact of the tariffs imposed for certain products imported into the United States from China, the low-end of EPS may decline to $3.65 or lower. The company anticipates to mitigate the effect of the tariffs in the long-term and expects long-term gross margin between 45% to 50%.
Zacks Rank and Stocks to Consider
Ubiquiti currently has a Zacks Rank #3 (Hold). Better-ranked stocks in the industry include Comtech Telecommunications Corp. (CMTL - Free Report) , Ribbon Communications Inc. (RBBN - Free Report) and Juniper Networks, Inc. (JNPR - Free Report) . While Comtech and Ribbon sport a Zacks Rank #1 (Strong Buy), Juniper carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Comtech has a long-term earnings growth expectation of 5%. It beat earnings estimates in each of the trailing four quarters, the average positive surprise being 136%.
Ribbon has a long-term earnings growth expectation of 12%. It beat earnings estimates in each of the trailing four quarters, the average positive surprise being 180.2%.
Juniper has a long-term earnings growth expectation of 5.3%. It beat earnings estimates in each of the trailing four quarters, the average positive surprise being 11%.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>