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Ubiquiti Networks Beats Q1 Earnings on Strong Execution

Zacks Equity Research

Ubiquiti Networks Inc. (UBNT) reported impressive fourth-quarter and fiscal 2014 results. For the fourth quarter, the company reported earnings of 56 cents a share which was 12% above the Zacks Consensus Estimate of 50 cents a share. Meanwhile, quarterly earnings were up 69.7% year over year from 33 cents reported in the prior-year quarter. 

Profits for the quarter were primarily driven by strong technological execution and strategic product launches.

Revenues for the quarter totaled $156.0 million, exhibiting a robust 54% rise from $101.2 million in the year-earlier quarter. On sequential basis as well, revenues were up from $148.3 million. Revenues also surpassed the Zacks Consensus Estimate of $148. Revenue growth was supported by strong performance across both the company’s segments.

Segment Revenue

Revenues in the Service Provider Technology segment grew 37.6% year over year to $124 million while on a sequential basis revenues spiked 2.5%.

Enterprise Technology revenues for the quarter scaled 188.3% year over year to $32 million. On a sequential basis revenues rose 17.2%.


Gross profit for the quarter grew year over year to $68.9 million while gross margin improved 30 basis points (bps) to 44.2%. Operating margin rose 104 bps to 33.9% in the fourth quarter. 

Cash and Balance Sheet

Net cash flow from operations for the fourth quarter was $55.8 million compared with $46.2 million in the fourth quarter of fiscal 2013. The upside was driven by improvement in the lead times to customers and a reduction in inventory. Cash and cash equivalents as of Jun 30, 2014 were $347.1 million as against $227.8 million as of Jun 30, 2013.


Following its fourth-quarter earnings release, the company provided guidance for the first quarter of 2015. Revenues for the first quarter are expected in the range of $156 million to 161 million while non-GAAP earnings are expected in the band of 52 cents to 54 cents a share.

Other Stocks to Consider

Ubiquiti currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the industry include DragonWave Inc (DRWI), Ericsson (ERIC) and ZTE Corp. (ZTCOY).

Read the Full Research Report on ERIC
Read the Full Research Report on UBNT
Read the Full Research Report on DRWI
Read the Full Research Report on ZTCOY

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