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

ARRIS International plc’s 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.

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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.

 

ARRIS International PLC Price, Consensus and EPS Surprise

 

ARRIS International PLC Price, Consensus and EPS Surprise | ARRIS International PLC Quote

 

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 TESS, Arista Networks, Inc. ANET and SeaChange International, Inc. 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.

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ARRIS International PLC (ARRS) : Free Stock Analysis Report
 
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