Heading into this second-quarter report, Arris Group
And why not? As soft as Arris looked, those already-reported industry peers were far worse off. For example:
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
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
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!