Bookmark and Share

Aruba Swings to Profit in Q2, Shares Rally (ARUN)

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.

Leave a Reply




You can use these HTML tags

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

All stories in are for informational purposes only. This is NOT a stock recommendation. This story is a daily light analysis featuring a stock with insider buying. With some caveats, insiders purchase a stock because they think the stock is going up. There are other factors to consider such as size of the transaction relative to their compensation and net worth. Sometimes, insiders might be propping a stock price up for future financing. Sometimes, the amount of insider buying are misread or misreported. Each month, DailyStocks releases a a summary of the stocks with insider buying. Sign up for the free monthly newsletter at . About is the place where you can find stories about stocks with insider buying, where you can educate yourself about stock market investing, and where you can perform the stock search engine analysis – you enter a stock symbol, and you get a resulting page of stock ticker indexed links so that you do not have to type the stock symbol each time.