It has been about a month since the last earnings report for ARRIS International plc . Shares have added about 4.1% in that time frame.
Will the recent positive trend continue leading up to its next earnings release, or is ARRS due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Fourth Quarter Earnings
ARRIS International's fourth-quarter 2017 earnings (excluding 81 cents from non-recurring items) of 88 cents per share beat the Zacks Consensus Estimate of 77 cents. Also, the bottom line improved 11.4% more than the year-ago quarter. Revenues of $1,738.6 million fell short of the Zacks Consensus Estimate of $1,760.8 million. Moreover, the top line declined 1.2% year over year.
Performance Details
Quarterly gross margin (on an adjusted basis) of this Suwanee, GA-based company was 28.8% compared with 25.6% in the prior-year quarter. Total order backlog at the end of the quarter under review was $1.12 billion compared with $1.11 billion at the end of the comparable quarter last year. Additionally, book-to-bill ratio was 1.02 compared with 1.04 in the year-earlier quarter.
During the fourth quarter, ARRIS’ cashflow from operating activities came in at $77.8 million compared with $35.3 million, generated a year ago. Moreover, the company exited the reported quarter with cash and cash equivalents of approximately $487.57 million, lower than $980.12 million at the end of 2016. Approximately $822 million of cash resources were used to complete the acquisition of Ruckus Networks from Broadcom in December 2017.
Long-term debt & financing lease obligations (net of current portion) were $2.12 billion compared with approximately $2.18 billion at 2016-end. The company bought back 1.9 million shares for $50 million in the quarter under discussion. Notably, ARRIS bought back 7.5 million shares for $197 million during 2017.
Q1 & 2018 Guidance
The company expects revenues in the range of $1.575-$1.625 billion for the first quarter of 2018. While earnings (adjusted) for the same period are estimated at 50-$55 cents per share.
For 2018, the company anticipates revenues between $7.100 billion and $7.350 billion. Whereas earnings (adjusted) are projected between $2.80 and $3.05 per share.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. There have been three revisions lower for the current quarter.
VGM Scores
At this time, ARRS has a subpar Growth Score of D, a grade with the same score on the momentum front. The stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for value based on our styles scores.
Outlook
Estimates have been broadly trending downward for the stock and the magnitude of these revisions indicates a downward shift. Notably, ARRS has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is ARRIS International (ARRS) Up 4.1% Since Its Last Earnings Report?
It has been about a month since the last earnings report for ARRIS International plc . Shares have added about 4.1% in that time frame.
Will the recent positive trend continue leading up to its next earnings release, or is ARRS due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Fourth Quarter Earnings
ARRIS International's fourth-quarter 2017 earnings (excluding 81 cents from non-recurring items) of 88 cents per share beat the Zacks Consensus Estimate of 77 cents. Also, the bottom line improved 11.4% more than the year-ago quarter. Revenues of $1,738.6 million fell short of the Zacks Consensus Estimate of $1,760.8 million. Moreover, the top line declined 1.2% year over year.
Performance Details
Quarterly gross margin (on an adjusted basis) of this Suwanee, GA-based company was 28.8% compared with 25.6% in the prior-year quarter. Total order backlog at the end of the quarter under review was $1.12 billion compared with $1.11 billion at the end of the comparable quarter last year. Additionally, book-to-bill ratio was 1.02 compared with 1.04 in the year-earlier quarter.
During the fourth quarter, ARRIS’ cashflow from operating activities came in at $77.8 million compared with $35.3 million, generated a year ago. Moreover, the company exited the reported quarter with cash and cash equivalents of approximately $487.57 million, lower than $980.12 million at the end of 2016. Approximately $822 million of cash resources were used to complete the acquisition of Ruckus Networks from Broadcom in December 2017.
Long-term debt & financing lease obligations (net of current portion) were $2.12 billion compared with approximately $2.18 billion at 2016-end. The company bought back 1.9 million shares for $50 million in the quarter under discussion. Notably, ARRIS bought back 7.5 million shares for $197 million during 2017.
Q1 & 2018 Guidance
The company expects revenues in the range of $1.575-$1.625 billion for the first quarter of 2018. While earnings (adjusted) for the same period are estimated at 50-$55 cents per share.
For 2018, the company anticipates revenues between $7.100 billion and $7.350 billion. Whereas earnings (adjusted) are projected between $2.80 and $3.05 per share.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. There have been three revisions lower for the current quarter.
ARRIS International PLC Price and Consensus
ARRIS International PLC Price and Consensus | ARRIS International PLC Quote
VGM Scores
At this time, ARRS has a subpar Growth Score of D, a grade with the same score on the momentum front. The stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for value based on our styles scores.
Outlook
Estimates have been broadly trending downward for the stock and the magnitude of these revisions indicates a downward shift. Notably, ARRS has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.