Arris Group: Finding Profits In Your Cable Box
Helix Investment Research • 11 Comments
Helix Investment Research • 11 Comments
Arris Group: 2 Combined Industry Leaders Selling At A Huge Discount
Wed, Jul. 27, 5:39 PM
Wed, Jul. 27, 4:54 PM
- Arris International (ARRS -2.4%) is up 8.8% after hours after beating on top and bottom lines in its Q2 earnings report and boosting guidance.
- Comps were affected by the January acquisition of Pace plc, an integration that is mostly complete, Arris says.
- Order backlog was $1.239B, up from a year-ago $651.3M but down sequentially from $1.335B. Book-to-bill ratio was 0.94, flat Y/Y.
- It's now guiding to Q3 revenues of $1.7B-$1.75B (in line) and adjusted EPS of $0.72-$0.77 (vs. consensus for $0.73). For the full year, it expects revenues to be at the high end of guidance while net income is trending above guidance (consensus expectations are for EPS of $2.60 on revenues of $6.76B).
- Cash and equivalents came to $902.9M.
- Conference call to come at 5 p.m. ET.
- Press release
Thu, May 5, 9:12 AM
- Gainers: SYNC +143%. LGCY +31%. AAWW +27%. EPE +21%. FCEL +19%. WTW +15%. DNR +14%. ZNGA +14%. CHK +13%. BCEI +12%. UNXL +12%. ARRS +10%. CRC +10%. CLMT +9%. ORIG +9%. QRVO +8%. GSV +8%. HMY +8%. VNR +7%. MEET +7%. SDRL 7%. CLR 6%. SGYP 6%. OAS 5%. REGN 5%. BABA 5%. AUY 5%.
- Losers: PTX -37%. FRSH -27%. SQNM -19%. FIT -13%. EBIO -11%. LB -10%. WFT -9%. SEAS -8%. ABC -8%. CTL -5%.
Mon, Mar. 14, 12:57 PM
- Believing risk/reward is balanced following the Pace acquisition and news of AT&T's plans to launch a Web-based DirecTV service (court hurt Arris' set-top sales), Goldman's Doug Clark has downgraded Arris (ARRS -5%) to Neutral, and cut his target by $8 to $26.
- Clark also thinks pay-TV industry consolidation could "create lumpiness" within Arris' results. His downgrades arrives a month after Arris fell sharply in the wake of mixed Q4 results and light Q1 guidance, and three weeks after the company announced it's cutting 10% of its workforce.
- Shares are a little over $2 above a 52-week low of $20.27 (set the day after the Q4 report).
Mon, Feb. 22, 1:58 PM
- With a $2.1B acquisition of Pace in the rear-view, Arris (ARRS +3.1%) has confirmed it will cut about 800 employees -- about 10% of its worldwide workforce.
- It's looking companywide to "identify areas where we can find cost savings, eliminate redundancies, and increase shareholder value,” Arris said.
- The reduction is touching areas including Arris' operations in Horsham, Pa., and Suwanee, Ga., along with former Pace and 2Wire locations, Multichannel News reports.
- The company had reduced workforce by nearly 500 employees, to about 6,500 total, after its April 2014 acquisition of Motorola Home.
Thu, Feb. 18, 12:48 PM
Wed, Feb. 17, 6:38 PM
- In addition to missing Q4 revenue estimates (while beating on EPS), Arris (NASDAQ:ARRS) is guiding for Q1 revenue of $1.56B-$1.61B and EPS of $0.37-$0.42, below a consensus of $1.68B and $0.58. The guidance accounts for the Pace acquisition, which closed on Jan. 4.
- Along with its numbers, Arris has announced a $300M buyback. It replaces prior authorizations, and is good for repurchasing 9% of shares at current levels.
- Q4 details: Order backlog stood at $715.8M as of the end of Q4 (before the Pace deal closed), up 28% Y/Y. Q4 book-to-bill was 1.14. GAAP operating expenses rose 5% to $305.8M. Arris ended 2015 with $879M in cash and over $1.5B in debt.
- ARRS -9.2% after hours to $21.70.
- Arris' Q4 results, earnings release
Wed, Feb. 17, 5:38 PM
Thu, Jan. 14, 5:40 PM
Oct. 28, 2015, 5:28 PM
- In addition to missing Q3 revenue estimates (while posting in-line EPS), Arris (NASDAQ:ARRS) is guiding for Q4 revenue of $1.1B-$1.15B and EPS of $0.40-$0.45, below a consensus of $1.26B and $0.60.
- Also: Order backlog fell 6% Q/Q and 14% Y/Y to $559M. Book-to-bill was 0.92 vs. 0.86 in Q2 and 0.94 a year ago.
- CEO Bob Stanzione: "We continue to encounter headwinds, in particular, those related to telco capex, industry consolidations and the strong U.S. dollar." The "industry consolidations" mentioned presumably include the AT&T/DirecTV deal. Peer Harmonic issued light guidance last week.
- Shares have fallen to $27.50 after hours. The 52-week low is $24.46.
- Q3 results, PR
Aug. 25, 2015, 5:40 PM
Jul. 29, 2015, 4:58 PM
- Arris' (NASDAQ:ARRS) Q2 results were in-line with the guidance provided in its July 10 warning. Q3 guidance is for revenue of $1.21B-$1.26B and EPS of $0.52-$0.58, below a consensus (might not fully take the warning into account) of $1.3B and $0.64.
- With a strong dollar and industry M&A weighing (as stated in the warning), order backlog fell 8% Q/Q and 10% Y/Y to $651.3M. Book-to-bill was 0.94 vs. 0.85 in Q1 (seasonally weak for bookings) and 1.08 a year ago. Arris ended Q2 with $620M in cash/short-term investments, and $1.59B in debt.
- Shares have risen to $32.17 AH.
- Q2 results, PR
Jul. 10, 2015, 5:40 PM
Jul. 10, 2015, 4:17 PM
- Arris (NASDAQ:ARRS) now expects Q2 revenue of $1.25B-$1.26B and EPS of $0.51-$0.55, below prior guidance of $1.27B-$1.31B and $0.53-$0.58, and a consensus of $1.29B and $0.56.
- CEO Bob Stanzione: "Our business continues to be impacted by external factors, most notably the various pending industry consolidations and by the strengthening of the US dollar. At this point, we anticipate that these factors will continue to impact us in the second half of 2015."
- He adds Arris' pending acquisition of U.K. rival Pace (has a strong European presence) is expected to "help counter some of these industry conditions as a result of anticipated synergies and a more diversified customer base and product portfolio."
- Shares have fallen to $29.00 AH. The set-top/cable infrastructure vendor reports on July 29.
Apr. 24, 2015, 3:17 PM
- Today's notable tech gainers include Chinese microblogging leader Weibo (WB +9.4%), VoIP/4G signaling infrastructure provider Sonus (SONS +5.9%), Chinese mobile game publisher Sky-mobi (MOBI +7.2%), Chinese auto site Bitauto (BITA +5.6%), and cloud e-mail encryption software provider Zix (ZIXI +3.2%). The Nasdaq is up 0.7%.
- Notable decliners include set-top/pay-TV infrastructure provider Arris (ARRS -4.5%), M2M/fleet management hardware and software provider CalAmp (CAMP -6.6%), and optical component vendor NeoPhotonics (NPTN -5.9%).
- Weibo, Sky-mobi, and Bitauto are taking part in a fresh Chinese tech rally. Weibo, also up strongly on Wednesday, is now up 21% from Tuesday's close. Zix is up 11% since posting Q1 results and reiterating its full-year sales guidance on Tuesday; a 14.7% Y/Y Q1 increase in orders to $14.3M is going over well. Sonus' gains come two days after the company posted Q1 results that were slightly better than the guidance provided in its March 24 warning.
- Arris is giving back some of the huge Thursday gains seen on account of its $2.1B deal to buy set-top rival Pace (and take advantage of its lower tax rates); Synergy Research estimates Arris/Pace will have a combined 17% global video infrastructure share (nearly even with Cisco's 18%), and a set-top share of ~30%. CalAmp is returning some of the huge Wednesday gains seen due to its FQ4 beat and solid FY16 guidance.
- Previously covered: Chip stocks (a lot of them), Amazon, Microsoft, 3D Systems, Unisys, Silicon Motion, Rackspace, Netgear, AMSC, Verisign, Acacia, Infosys, Juniper, Ubiquiti, Maxwell, Synaptics, HomeAway, Gigamon
Apr. 23, 2015, 12:45 PM
ARRIS International Plc engages in entertainment and communications technology. It combines hardware, software, and services across the cloud, network, and home to power television and Internet for millions of people around the globe. The company was founded on April 20, 2015 and is... More
Industry: Communication Equipment
Country: United States
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