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Aviat (AVNW) to Report Q4 Earnings: What's in the Offing?

By Zacks Investment ResearchStock MarketsAug 23, 2021 07:02AM ET
Aviat (AVNW) to Report Q4 Earnings: What's in the Offing?
By Zacks Investment Research   |  Aug 23, 2021 07:02AM ET
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Aviat Networks (NASDAQ:AVNW), Inc. AVNW is scheduled to report fourth-quarter fiscal 2021 results (ended Jul 2, 2021) on Aug 25, after the closing bell. In the previous quarter, the company delivered an earnings surprise of 32.4%. It pulled off a trailing four-quarter earnings surprise of 57.3%, on average.

The Austin, TX-based microwave networking solutions provider is expected to have recorded higher revenues on a year-over-year basis on the back of robust market dynamics, cost-reduction efforts, favorable customer mix and higher investments in innovative software solutions. Solid liquidity position and balance sheet despite the COVID-19 uncertainties might have pushed the company to execute on key long-term strategic objectives.

Encouraged by a resilient business model, Aviat Networks is likely to have benefited from strong demand for best-in-class broadband connectivity in the rural areas and mission critical networks. Also, higher revenues from private network business in North America, significant bottom-line improvement and margin expansion fueled by an upsurge in software sales might have bolstered the company’s profitability. Back-to-back 5G deployment wins and growing relationship with U.S. Federal Market might have acted as a tailwind as well.

Key Q4 Developments

During the quarter under review, Aviat joined forces with Connect America Fund, FCC Rural Development Opportunity Fund and USDA Re-Connect awardee — Union Wireless — to augment the latter’s backhaul capacity on the back of its all-outdoor WTM radio systems. The radio platform will enable the telco to not only establish a strong, cost-effective network but also accelerate lead times, time-to-market with reduced operational overheads and real-time order tracking services.

The wireless transport solutions leader unveiled a list of improvements to its AviatCloud SaaS-based suite of software solutions. The move enhanced Aviat Design, Aviat Store and Aviat Managed Services, which are responsible for streamlining the design, purchase, optimization and management of backhaul networks. It also introduced a new “My Orders” online order management application that allows operators to track order status on a real-time basis and aid in network planning and deployment schedules with utmost ease.

In addition, Aviat Networks launched the industry’s first single-antenna multi-band radios combining 11 and 13 GHz microwave bands with 80 GHz E-Band in a single box. The significant launch is expected to facilitate 5G and rural broadband customers on the back of robust network tools and lower total cost of ownership while extending Aviat’s leadership in multi-band solutions. These events make Aviat well poised to benefit from significant government funding such as the $20B Rural Digital Opportunity Fund to propel technological innovations in the rural regions. The company’s fiscal fourth-quarter top line is likely to have been positively impacted by such developments.

For the to-be-reported quarter, the Zacks Consensus Estimate for total revenues is pegged at $66 million, which indicates an increase of 4.8% from the year-ago quarter’s reported figure. Adjusted earnings per share are pegged at 46 cents, which suggests an improvement from 38 cents reported in the year-ago quarter.

What Our Model Says

Our proven model doesn’t conclusively predict an earnings beat for Aviat this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: Aviat’s Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is -16.48% as the former is pegged at 38 cents and the latter at 46 cents.

Aviat Networks, Inc. Price and EPS Surprise

Zacks Rank: Aviat currently has a Zacks Rank #5 (Strong Sell).

Stocks to Consider

Here are some companies that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:

DICK'S Sporting Goods, Inc. DKS is slated to release second-quarter 2021 results on Aug 25. It has an Earnings ESP of +3.59% and currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Ulta Beauty (NASDAQ:ULTA), Inc. ULTA is slated to release second-quarter 2021 results on Aug 25. It has an Earnings ESP of +17.59% and carries a Zacks Rank #2, at present.

Burlington Stores (NYSE:BURL), Inc. BURL has an Earnings ESP of +15.26% and a Zacks Rank of 1. The company is set to report second-quarter 2021 results on Aug 26.

Tech IPOs With Massive Profit Potential: Last years top IPOs surged as much as 299% within the first two months. With record amounts of cash flooding into IPOs and a record-setting stock market, this year could be even more lucrative.

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Aviat (AVNW) to Report Q4 Earnings: What's in the Offing?

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Aviat (AVNW) to Report Q4 Earnings: What's in the Offing?

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