Aruba Networks Shares Up 6% As Q2 Results Top Estimates

(RTTNews) - Shares of Aruba Networks, Inc. (ARUN) surged more than six percent in extended trading on Thursday after the distributed enterprise network solutions provider reported results for the second quarter that topped analysts' expectations.

The company also reported a profit for the quarter compared to a net loss last year, reflecting improved operating margins and double-digit revenue growth.

"We are pleased to report solid results for the second quarter, reflecting continued execution on our strategic plan. Our results were supported by continued growth in our key geographies, strong year-over-year performance in our Federal vertical, further success in penetrating the Global 2000, and increasing traction in our SME business," President and CEO Dominic Orr said in a statement.

The Sunnyvale, California-based company posted net earnings of $5.68 million or $0.05 per share for the second quarter, compared to a net loss of $10.70 million or $0.10 per share in the prior-year quarter.

Excluding items, adjusted net income for the quarter was $33.81 million or $0.30 per share, compared to $21.35 million, or $0.18 per share in the year-ago quarter.

On average, 31 analysts polled by Thomson Reuters expected the company to report earnings of $0.27 per share for the quarter. Analysts' estimates typically excludes special items.

Revenues for the quarter increased 21 percent to a record of $212.93 million from $176.36 million from the same quarter last year, and topped twenty-eight Wall Street analysts' consensus estimate of $210.22 million.

Product revenues for the quarter grew to $173.72 million from $141.76 million, as well as professional services and support revenues increased to $39.21 million from $34.60 million in the year-ago quarter.

Operating margin for the quarter was 10.3 percent, compared to a negative 2.1 percent last year as gross margin expanded 200 basis points and lower operating expenses as a percentage of total revenues.

Looking ahead, Orr added, "We believe we are well positioned to capitalize on the continued growth in WLAN, the potential opportunities from increased E-Rate funding later this year, and the continued 802.11ac refresh cycle."

ARUN closed Thursday's regular trading session at $22.61, up $0.37 or 1.66% on a volume of 15.81 million shares. The stock surged a further $1.44 or 6.37 in after-hours trading.