Aruba Networks’ Q1 Results Beat Estimates, Issues Q2 Guidance (ARUN)

Network access solutions provider Aruba Networks (NASDAQ: ARUN) saw heightened volatility yesterday before ending the trading session with a gain of over 3%. After the market closed Thursday, the company reported fiscal 2013 first-quarter results that beat estimates. The company also issued fiscal 2013 second-quarter revenue guidance, as a growth percentage, better than the Street’s expectations and earnings outlook in line with the estimates.

The California-based Aruba offers an operating system software named ArubaOS for wired, wireless and remote access products for integrating user-based security. The company also offers mobility controllers and access switches.

The total revenue for the fiscal 2013 first quarter increased 21% to $144.48 million from $119.35 million in the first quarter of fiscal 2012. The revenue estimate of analysts was $142.53 million for the first quarter of fiscal 2013.

The GAAP net loss for the first quarter widened to $0.83 million, or $0.01 per share, from $0.47 million, or break even per share, in the corresponding period of fiscal 2012.

The non-GAAP net income for the reported quarter was $22.1 million, or $0.18 per share, compared to $16.7 million, or $0.14 per share, in the first quarter of fiscal 2012. The consensus estimate of analysts was $0.17 per share for the first quarter of fiscal 2013.

Provision for income taxes for the first quarter of 2013 increased to $5.95 million from $2.66 million in the similar period last fiscal year.

Commenting on the results, Dominic Orr, Aruba’s President and CEO, said, “We delivered a strong first quarter with 21% percent revenue growth year-over-year and our fourteenth consecutive quarter of record revenue. During the quarter, we saw healthy growth across our major products and core verticals.”

Michael Galvin, Aruba’s CFO, opined, “In addition to achieving record revenue, we delivered strong gross margin and operating margin results. Due to solid working capital management, we generated $36.9 million in cash flow from operations and ended the quarter with $377.5 million in cash, cash equivalents and short-term investments.”

Yesterday, the share price opened at $18.76 and moved up to $19.10 before making a sharp fall into negative territory. After hitting a low of $18.61 at half past noon, the share price reversed trend. The last two hours of the trading session saw the share price gain over 2% to reach $19.61.

Aruba expects fiscal 2013 second-quarter revenue to rise from 19% to 21% on a year-over-year basis. The analysts anticipate an 18% growth over the prior-year corresponding period. The company anticipates earnings per share of $0.19, in line with analysts’ estimates.

Aruba ended yesterday’s trading session at $19.46 per share, up $0.64 or 3.4% on a volume of 4.34 million shares.

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Published by Steve Hackney

Steve Hackney is a corporate finance professional with over 14 years of experience in cash management and investing. He earned a Bachelor of Science in Finance from Florida State University and holds a Certified Treasury Professional certification. Steve lives in Orlando, Florida with his family.