Aruba Networks Surprises with Loss

Aug.29.07 | About: Aruba Networks, (ARUN)

Aruba Networks posted a fiscal fourth-quarter loss that widened $3.3M ($0.04/share) from $1.4M ($0.11/share) a year earlier despite a 74% rise in revenue to $41.7M from $23.9M. Excluding $5.4M of expenses, the maker of wireless networking equipment earned $2M ($0.02/share) compared with $1.1M ($0.09/share) last year. The per share loss was smaller this year because there were 75.6M shares outstanding in the current quarter, some six-times the 12.7M outstanding a year ago. Analysts were expecting a profit of a penney a share, on average for the quarter. Sales and marketing expenses doubled to $20.9M. Ahead of the report, on Monday WR Hambrecht had initiated coverage of the stock with a "Buy" recommendation and $25 12-month price target citing, among other things, the company's rapid revenue growth. Earlier this week, two Motorola units filed suit against Aruba alleging the company infringed on four patents related to wireless local area network communications technologies and seeking monetary damages and a permanent injunction against Aruba. Aruba shares fell 2.3% to $19.15 AH on Tuesday, extending a 4.6% decline from the regular trading session.

Sources: Press release, AP , WR Hambrecht research (.pdf), Dow Jones, Bloomberg, MarketWatch
Commentary: The Street's Bullish on Aruba Ahead of EarningsIPO Analysis: Aruba Networks Doesn't Have Enough Under The Hood
Stocks/ETFs to watch: ARUN, PXQ. Competitors: MOT

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