A Ruckus Wireless executive playing to the crowd at a recent conference in Rome Credit: Ruckus Wireless via Facebook.
Shares of Ruckus Wirelessstock were down 4.11% at 5:46 p.m. ET on Thursday evening, after the company posted first-quarter revenue and earnings that came short of estimates. Here's a closer look at the final totals versus Wall Street's projections:
|RKUS||Revenue||YOY Growth||EPS||YOY Growth|
|Consensus estimate||$85.62 million||14.1%||$0.08||60%|
|Q1 actuals||$82.08 million||9.4%||$0.07||40%|
Sources: S&P Capital IQand Ruckus Wireless press release.
Commenting on the results, CEO Selina Lo said in a press release:
What went right: Financially, Ruckus didn't have much to celebrate. New products and relationships are aimed at changing that. In addition to the potential upside from E-Rate, in its press release Ruckus touted a forthcoming partnership withNokia The company's802.11ac technology will be integrated into Nokia Networks' "Flexi Zone" small cell indoor and outdoor wireless products.
What went wrong:As Lo says in her statement, big deals were delayed as clients took longer to make purchases. That's not necessarily a bad thing, but it's also a common problem for companies like Ruckus, which rely on large, long-term deals that include developing and laying an infrastructure. Cash can get consumed quickly when contracts go unsigned. In this case, Ruckus burned through $5.3 million in cash to fund first-quarter operations. Last year, the company generated $3.6 million in operating cash flow.
What's next:Looking ahead, Ruckus Wireless projects $86 million to $91 million in second-quarter revenue, resulting in $0.07 to $0.10 in net income per share after excluding the impact of stock-based compensation and other one-time and non-cash charges.
Analysts tracked by S&P Capital IQ have the company generating $90.72 million in revenue and $0.10 a share in adjusted profit, versus $81 million and $0.07 a share in last year's Q2. Longer term, analysts have Ruckus Wireless growing earnings by an average of 22.57%annuallyduring the next three to five years.
And in terms of the overall business? Investors should keep a close eye on education spending. Ruckus has hinged much of its immediate future on the success of the E-Rate program for bringing fast wireless service to schools and libraries.
The article Ruckus Wireless Inc. Earnings Disappoint As Large Clients Delay Deals originally appeared on Fool.com.
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