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Viavi (VIAV) Beats Q1 Earnings Estimates on Record Revenues

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Viavi Solutions Inc. VIAV reported solid first-quarter fiscal 2022 (ended Oct 2, 2021) results, wherein both the bottom and the top lines beat the Zacks Consensus Estimate.

Bottom Line

On a GAAP basis, net loss in the quarter was $54.8 million or a loss of 24 cents per share against a net income of $19.7 million or 8 cents per share in the year-ago quarter. The deterioration was primarily due to higher operating and other expenses.

Non-GAAP net income was $58.2 million or 24 cents per share compared with $48.3 million or 21 cents per share in the prior-year quarter. The bottom line beat the Zacks Consensus Estimate by 3 cents.

Viavi Solutions Inc. Price, Consensus and EPS Surprise

Viavi Solutions Inc. Price, Consensus and EPS Surprise
Viavi Solutions Inc. Price, Consensus and EPS Surprise

Viavi Solutions Inc. price-consensus-eps-surprise-chart | Viavi Solutions Inc. Quote

Revenues

Quarterly total revenues grew 14.8% year over year, despite supply chain challenges, to reach a record of $326.8 million. The top line surpassed the consensus estimate of $311 million.

The result reflects end-market strength in fiber, wireless, and cable products in NSE (Network and Service Enablement) and demand for anti-counterfeiting and 3D sensing products in OSP (Optical Security and Performance Products). Viavi expects the strong momentum in NSE to carry over into 2022.

Segment-wise, revenues from NE were up 26.4% from the year-ago quarter to $204.9 million driven by an increase in fiber, wireless, and cable products. SE revenues grew 7.5% to $23 million led by growth in assurance and data center products. OSP revenues decreased 2.3% year over year to $98.9 million.

Region-wise, Viavi generated 37.2% of total revenues from the Americas, 38.6% from the Asia Pacific, and 24.2% from EMEA (Europe, the Middle East, and Africa).

Cash Flow & Liquidity

During the fiscal first quarter, Viavi generated $53.4 million of cash from operating activities. As of Oct 2, 2021, the company had $915.6 million in cash and cash equivalents with $800.7 million of long-term debt.

Q2 Guidance

For the second quarter of fiscal 2022 (ending Jan 1, 2022), Viavi expects revenues in the range of 296-$310 million. Non-GAAP earnings are estimated in the band of 18-20 cents per share.

Zacks Rank & Stocks to Consider

Viavi currently has a Zacks Rank #4 (Sell).

Some better-ranked stocks in the broader industry are Harmonic Inc. HLIT, Clearfield, Inc. CLFD, and SeaChange International, Inc. SEAC. While Harmonic and Clearfield sport a Zacks Rank #1 (Strong Buy), SeaChange carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Harmonic delivered a trailing four-quarter earnings surprise of 61.1%, on average.

Clearfield pulled off a trailing four-quarter earnings surprise of 49%, on average.

SeaChange delivered a trailing four-quarter earnings surprise of 28.9%, on average.


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