ARRIS' (ARRS) Q3 Earnings Surpass Estimates, Revenues Lag

ARRIS International plc’s (NASDAQ:ARRS) third-quarter 2017 earnings (excluding 33 cents from non-recurring items) of 80 cents per share beat the Zacks Consensus Estimate by 11 cents. Also, the bottom line improved 3.9% from the year-ago quarter.

The earnings beat and its year-over-year improvement seem to please investors. Consequently, shares of the company rose 1.6% in after-market trading on Nov 1.

Revenues of $1,728.5 million fell short of the Zacks Consensus Estimate of $1,773.2 million. However, the top line reflected a 0.2% year-over-year improvement.

Performance Details

Quarterly gross margin (on an adjusted basis) of this Suwanee, GA-based company was 25.3% compared with 26.3% in the year-ago quarter. Total order backlog at the end of the quarter under review was $1.08 billion than $1.03billion at the end of the year-ago quarter. Additionally, book-to-bill ratio was 0.86 compared with 0.88 in the prior-year quarter.

During the third quarter, ARRIS generated cash of $116 million from operating activities compared with $289 million a year ago. In fact, the company exited the reported quarter with cash and cash equivalents of approximately $1.38 billion, higher than $980.12 million at the end of 2017.

Long-term debt & financing lease obligations (net of current portion) were $2.11 billion compared with approximately $2.18 billion at 2016-end. The company bought back 0.7 million shares for $20 million in the reported quarter.

Notably, ARRIS has bought back 5.7 million shares for $147 million so far this year.

Guidance

ARRIS expects earnings (adjusted) in the band of 74-80 cents in fourth-quarter 2017. Revenues are projected in the range of $1,675-$1,750 million. The Zacks Consensus Estimate for earnings is pegged at 84 cents on revenues of $1.83 billion.

Zacks Rank & Key Picks

ARRIS currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader Computer and Technology sector are TESSCO Technologies Incorporated (NASDAQ:TESS) , Arista Networks, Inc. (NYSE:ANET) and SeaChange International, Inc. (NASDAQ:SEAC) . While TESSCO Technologies sports a Zacks Rank #1 (Strong Buy), Arista Networks and SeaChange International carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of TESSCO Technologies, Arista Networks and SeaChange International have gained more than 10%, 40% and 2%, respectively, in the last six months.

Zacks’ Best Private Investment Ideas

While we are happy to share many articles like this on the website, our best recommendations and most in-depth research are not available to the public.

Starting today, for the next month, you can follow all Zacks' private buys and sells in real time. Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors.

Click here for Zacks' private trades >>