What's happening: Shares of Ruckus Wireless jumped as much as 18.5% higher on Thursday morning. The enterprise-class Wi-Fi networking specialist reported strong second-quarter results on Wednesday night, helping the stock reverse a terrible long-term slide. The stock was up 16.5% as of 11:35 a.m.
Why it's happening: In the second quarter, Ruckus reported adjusted earnings of $0.09 per share on $92.2 million in total sales. The bottom-line result was in line with analyst targets, but revenues came in 4.5% above the consensus. Management set similarly skewed guidance targets for the third quarter, with in-line earnings goals but strong expected sales.
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In a conference call with analysts, Ruckus CEO Selina Lo noted that a new line of gigabit Wi-Fi systems has been well-received by customers across all geographic and vertical markets.
"Columbia Public Schools is using more than 1,400 Ruckus R710 in the nation's first districtwide production deployment of a Gigabit-class 11ac Wave 2 network," Lo said. "According to the school, the R710 was able to deliver twice the Wi-Fi capacity and higher levels of TCP throughput at a longer range with a 60% to 70% reduction in the number of access points required compared to the closest competitor in their side by side trial."
If that sounds like technical mumbo-jumbo, rest assured that it's music to the ears of a network manager who's looking to install a high-speed, high-quality Wi-Fi network. That brief statement oozes with selling points, and serves to clarify how Ruckus is beating sales expectations right now. Until rivals catch up with these market-leading features for corporate Wi-Fi solutions, this product line is practically selling itself.
Image source: Ruckus Wireless.
To underscore that point, the new 802.11ac line accounted for 71% of Ruckus' access point sales in the second quarter. Not bad for a device that was introduced as recently as early April.
That being said, this spike is more a reparation of earlier damage than a sudden wealth-builder. Heading into this report, Ruckus investors could look back at a 20% 52-week slide, driven by disappointing sales and slow deal-making. This quarter makes up for some of that damage, but the company must still rebuild a lot of bygone investor trust.
The high-speed router line could be just the ticket to get it done, but there can be no guarantees.
The article Why Ruckus Wireless Inc. Kicked Up a Storm Today originally appeared on Fool.com.
Anders Bylund has no position in any stocks mentioned. The Motley Fool recommends Ruckus Wireless. 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.
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