Shares of Aruba Networks Inc. (NASDAQ: ARUN) rallied on Friday after the Wi-Fi equipment manufacturer reported that it swung into a profit in its fiscal second quarter thanks to favorable comparables from the last quarter when the company took huge one-time charge while robust demand for its wireless products also boosted the top line growth.
The Sunnyvale, California-based Company, which offers generation-next network access solutions for mobile enterprise networks, not only topped its own forecast on both revenue and earnings front but also generated record cash flows of $45.7 million from operations, said Aruba’s Chief Financial Officer Michael Galvin.
The Company has been sequentially posting strong quarterly revenue growth as the demand for wireless products is growing at a brisk pace in the backdrop of ever-increasing mobile market. Nonetheless, the competition has also intensified in this high-margin sector which has started to impact gross margins. During the quarter, Aruba’s gross Margin contracted to 71.3% from 71.9%, in the year earlier quarter.
For the fiscal second quarter ended January 31, Aruba reported a net profit of $5 million or 4 cents a share, compared to a loss of $11.4 million or 11 cents a share.
Stripping out onetime items such as acquisition related cost, stock based compensation, impact of taxes and some other expenses, adjusted or non-GAAP earnings came at 22 cents compared to 16 cents , in the same period of last year.
Revenue during the period climbed 23% to $155.4 million. Company’s President and Chief Executive, Dominic Orr said that several new additions to its product-line also helped driving up the revenue growth.
Earlier in November, the Company expected earnings to come at 19 cents a share on revenue of $150 million to $153 million.
For the current quarter, the Company expects revenue of at least $159 million, topping analysts’ consensus estimate for $158.2 million.