What happened
There's nothing like an estimates-trouncing quarter to put some zing into a company's stock price. That was the joyful dynamic experienced by Aviat Networks(NASDAQ: AVNW) on Thursday, when investors piled into the networking products and services company after it published its latest earnings report. The stock was a real hot item, and closed the session more than 19% higher.
So what
After market hours on Wednesday, Aviat unveiled the figures for its fiscal 2023 second quarter, and they were impressive.
For the period, which ended Dec. 30, the company's revenue totaled $90.7 million, which was nearly 17% higher on a year-over-year basis. Non-GAAP (adjusted) net income came in at $11.1 million ($0.94 per share) for a robust improvement of almost 31% over the year-ago quarter. That profit margin also notched a new all-time quarterly record for Aviat.
Both headline numbers well exceeded the average analyst estimates. Collectively, the prognosticators following Aviat were modeling for less than $85 million on the top line, and only $0.79 per share in adjusted net income.
The company is benefiting from the long-tail 5G upgrade cycle currently being undertaken by large telecoms throughout the country. Management also said its integration of Redline Communications, which it acquired in July, is proceeding ahead of schedule, and that the company "has begun to execute on cross-selling opportunities."
Now what
That convincing earnings beat was sweet, but Aviat had something even sweeter to offer investors: It raised its guidance for its fiscal 2023. It now anticipates it will book revenues of $340 million to $347 million, and post adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $45 million to $47.5 million. It did not provide a forecast for net income.
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
