Ruckus Wireless Inc. Earnings: Slow Growth Spooks Investors

By Markets Fool.com

Continue Reading Below

The Ruckus Wireless booth, drawing a crowd at the National Retail Federation's Big Show in New York City last month. Credit: Ruckus Wireless via Facebook.

Shares of Ruckus Wireless stock were down 7.7% as of 4:17 p.m. ET Tuesday as after-market traders dumped the stock on worse-than-expected revenue growth. Here's a closer look at the final totals versus Wall Street's projections:

Ruckus Wireless Revenue YOY Growth EPS YOY Growth
Consensus estimate $88.8 million 21.6% $0.12 71.4%
Q4 actuals $85.9 million 17.6% $0.12 71.4%
DIFFERENCE ($2.9 million) (4%) $0.00 0%

Sources: S&P Capital IQand Ruckus Wireless press release.

For the full year, Ruckus Wireless reported $326.92 million in revenue and $0.44 a share in non-GAAP profit. Analysts tracked by S&P Capital IQ were calling for $329.87 million and $0.43 a share, respectively.

Continue Reading Below

"Our new products and solutions have enabled us to expand our addressable market and grow market share, which should be key revenue drivers for us in 2015 and beyond," said CEO Selina Lo in a press release announcing Q4 and full-year results.

What went right:Cost of revenue grew just 11.8%, leading to a nice improvement in gross margin -- to 68.4% from 66.7%in last year's Q4. Ruckus has expanded margins every year since 2010, S&P Capital IQ reports.

What went wrong:Revenue growth came slower than expected despite a vast and growing customer base. As of Q4, Ruckus had over 48,000 enterprise end-customers and served 200 service providers. A greater emphasis on Wi-Fi calling among carriers should continue to drive growth.

What's next:Looking ahead, Ruckus expects total revenue in the range of $84 million to $87 million and $0.08 to $0.09 in non-GAAP earnings per share. Analysts tracked by S&P Capital IQ have the wireless specialist generating $89.91 million in revenue and $0.11 a share, respectively. In either case, Ruckus appears headed for a significant improvement from last year's Q1 results. ($75.05 million and $0.05, respectively).

Longer term, they have Ruckus Wireless generating 24.71%average annual earnings growth during the next three to five years.

The article Ruckus Wireless Inc. Earnings: Slow Growth Spooks Investors originally appeared on Fool.com.

Tim Beyers endures a ruckus each day when his kids get home from school. He's also a member of theMotley Fool Rule Breakers stock-picking team and the Motley Fool Supernova Odyssey I mission and owned shares of Apple at the time of publication. Check out Tim'sweb homeandportfolio holdingsor connect with him onGoogle+,Tumblr, or Twitter, where he goes by@milehighfool.The Motley Fool recommends Apple, Facebook, and Ruckus Wireless. The Motley Fool owns shares of Apple and Facebook. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.