UPDATE 2-Arris Q4 beats Street, sees Q1 largely below estimates

Wed Feb 10, 2010 6:34pm EST

* Q4 adj EPS $0.32 vs est $0.27

* Expects sales to Comcast to be down this year

* Shares fall 2 pct after market (Adds conference call details, analyst comments)

By Saqib Iqbal Ahmed

BANGALORE, Feb 10 (Reuters) - Communications technology company Arris Group Inc (ARRS.O) posted quarterly results above market expectations, helped by strong sales of its new generation cable edge routers, but forecast first-quarter results largely below estimates.

The first quarter is typically the worst quarter for Arris, Chief Executive Robert Stanzione said on a call with analysts.

Arris, which sells products that enable high speed data and video traffic, expects first-quarter adjusted earnings of 18 cents to 22 cents a share, on revenue of $253 million to $273 million.

Analysts on average were looking for earnings of 22 cents a share, excluding special items, on revenue of $272.9 million, according to Thomson Reuters I/B/E/S.

Stanzione said the company expects sales to Comcast Corp (CMCSA.O), its biggest customer, to be down this year.

However, the CEO expects sales to other customers to more than make up for the difference as Docsis 3.0, a new technology that allows for faster Internet access, spreads across the globe.

There are a lot of cable operators worldwide who are transitioning to the new technology, Avondale Partners analyst Blair King said.

Fourth-quarter net income was $33.3 million, or 26 cents a share, compared with a loss of $163.7 million, or $1.33 cents a share, last year.

The company recorded a goodwill impairment charge of $209.3 million last year.

Excluding special items, Arris earned 32 cents a share, ahead of analysts' expectations for earnings of 27 cents a share.

Revenue rose 3 percent to $300.0 million, beating analysts' estimates of $292.0 million.

Shares of the company were trading down 2 percent at $9.50 in extended trade. They closed at $9.69 Wednesday on Nasdaq. (Reporting by Saqib Iqbal Ahmed in Bangalore; Editing by Anne Pallivathuckal)

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