Heading into this second-quarter report, Arris Group (Nasdaq: ARRS) looked like a loser. Rattled by a string of bad news from other network-gear makers, investors had sent Arris shares on a long, slow downward swoon in July -- capped with a sudden 3% drop on the very eve of the report.

And why not? As soft as Arris looked, those already-reported industry peers were far worse off. For example:

Company

Return FromĀ 
July 1 to July 27

CAPS RatingĀ 
(out of 5)

Arris (2.5%) *****
Juniper Networks (Nasdaq: JNPR) (20.0%) **
LM Ericsson (Nasdaq: ERIC) (10.7%) ***
Harmonic (Nasdaq: HLIT) (19.0%) *****

Data from Google Finance and Motley Fool CAPS.

And that's where Arris came through with some good news, even as yet another networker tanked -- Alcatel-Lucent (NYSE: ALU) fell as much as 22% on Thursday thanks to a terrible earnings report. Arris didn't even need a blowout report to justify a sudden jump, but took a 14.5% intraday leap on rather humdrum results.

Sales fell 5% year-over-year to $266 million and non-GAAP earnings stayed flat at $0.24 per share. That's a $5 million miss on the top line but a $0.06 stomping of earnings estimates, and third-quarter guidance ranges nestled right around Wall Street's projections. One foot in the freezer and one on the stove, and you'll feel all right on average.

Arris cleared out some of its order books this quarter, reducing last quarter's $178 million backlog to $154 million and thus shrinking the book-to-bill ratio well below the crucial 1.0 mark. That means less visibility into upcoming revenue-generating billings and is generally a bad thing.

That said, CEO Bob Stanzione said that visibility is actually increasing, lower book-to-bill ratios notwithstanding. That's because cable customers are showing high interest in a number of new Arris products, including the Home Media Gateway that was just rolled out to its first customer, Canadian cable guy Shaw Communications (NYSE: SJR). Stanzione sees this product alone producing as much as 10% revenue growth for Arris in 2012. Largest customer Comcast (Nasdaq: CMCSA) currently contributes about 25% of Arris' revenue, and that's just with basic DOCSIS 3 system upgrades. If and when the leading cable company adopts those media gateways, I can certainly see Stanzione's prediction coming true.

So Arris shares have essentially moved nowhere in three months after Thursday's spike. At the start of 2011, we called Arris the top stock for 2011 in a special report and the stock has outperformed but not exactly crushed the S&P 500 benchmark since then. But the investing thesis remains intact and Arris should still fulfill our hopes in the second half or, belatedly, in 2012.

We've kept that report up-to-date throughout the year, so it still smells like daisies. Grab a fresh copy right now by clicking here and learn more about how Arris is poised to ride broadband expansion to new riches. Best of all, the report is 100% free!