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Arris Offers Hybrid Fiber Coax

Zacks Equity Research

Arris Group Inc. (ARRS) – a global technology leader in the development of advanced cable telephony, next-generation high-speed data network – is offering an advanced range of Hybrid Fiber Coax (HFC) optics, nodes and amplifiers targetting European cable operators.

The newly-launched HFC portfolio includes flexible design, better network efficiency, reduced installation time, cost effective, alternate power backup, quickly upgradable and electronic remote device. Arris’s UCN224, UCN212 UCA222 and UCA212 have three pins with two active modes and easily support 1.2 GHz network speed.

Such advanced features will not only help the European cable operators to drive their networks but also help them to offer multiscreen viewing without any disruption to their customers.

The concept of TV viewing has changed radically with higher adoption of smartphones and tablets. Viewers like easy and comfotable access to their favourite shows anytime and anywhere. Thus, the mounting data usage weighs heavy on the network and therefore, affects network performance. So, implementing the new HFC technology will boost the cable operator’s performance.

Arris recently acquired the cable set-top box business of Motorola Mobility, a subsidiary of Google Inc. (GOOG), for a total consideration of $2.35 billion. The acquisition of the Motorola set-top box business will undoubtedly help Arris attain a strong foothold in the video offerings market.

In the recently concluded quarter, Arris’ total revenue was $353.7 million, up 16.8% year over year. Quarterly Domestic revenues were 68.3% while International revenues were 31.7%.

Comcast Corp. (CMCSA) and Time Warner Cable (TWC) are the two largest customers of Arris and have together contributed 43% of Arris’ total revenue. Hence, we believe that by targeting the European market with its advanced products, Arris will reduce its dependency on the domestic market, thereby driving International revenues for the company.

Currently, Arris Group Inc. carries a Zacks Rank #3 (Hold).

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