Arris posts strong Q4, but lower estimates

Thu, 02/12/2009 - 7:30am
Mike Robuck

Bolstered by strong sales of DOCSIS 3.0-enabled cable modem termination systems (CMTSs), Arris’ fourth-quarter revenues of $292.4 million were up 17 percent over the same quarter in 2007.

Full-year 2008 revenues were $1.14 billion – up $152.4 million, or 15 percent, as compared with full-year 2007 revenues of $992.2 million. Arris said the revenue growth in 2008 was a result of strong market acceptance of both Arris products and new product offerings that resulted from the late 2007 acquisition of C-Cor.

Non-GAAP net income in the fourth quarter was 25 cents per diluted share, as compared with the fourth quarter of 2007 at 16 cents per diluted share, and as compared with the third quarter of 2008 at 24 cents per diluted share. Net income per diluted share on a non-GAAP basis for the full-year 2008 was 77 cents, as compared with 79 cents in 2007.

Arris’ broadband communications system sales were up $225 million, an increase of 3.4 percent over the third quarter and a 3.7 percent increase over the fourth quarter in 2007. The increase was attributed to the sale of DOCSIS 3.0 CMTS equipment and, to a lesser extent, embedded multimedia terminal adapter (EMTA) sales.

Arris ended 2008 with $427.3 million of cash and short-term investments, compared with $391.8 million at the end of 2007. The company generated approximately $102.5 million of cash from operating activities in the fourth quarter of 2008, and $189 million for the full-year 2008. This compares to cash generated from operating activities of $52.8 million and $63.4 million during the fourth quarter and full-year 2007, respectively.

Arris lowered its first-quarter guidance to revenues in the range of $245 million to $265 million with non-GAAP net income per diluted share in the range of 14 cents to 19 cents, and GAAP net income per diluted share, in the range of 6 cents to 11 cents.

Arris cited the current disruptions in the capital markets as the reason for a slower start this year as some service providers are curbing their new equipment purchases. During the conference call yesterday, Arris said it anticipates Comcast’s purchase of DOCSIS 3.0 equipment won’t be as high in the first quarter of this year as it was in the fourth quarter.

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