Why the stock of Ubiquiti Networks soared today – The Motley Fool



What happened

Actions of Ubiquiti Networks (NASDAQ: UBNT) They went up 16.4% at 3:00 p.m. EST on Friday after the hardware network specialist announced good fiscal results for the second quarter of 2019

More specifically, Ubiquiti's revenues during the holiday quarter increased 22.5% year-on-year to $ 307.3 million, which translated into a 75% increase in adjusted earnings per share to $ 1.33. Ubiquiti does not provide a specific quarterly guidance for the top or bottom line, so, to get a perspective, and although we do not pay much attention to Wall Street's demands, both figures comfortably topped consensus estimates of earnings from $ 1.08 per share. Income close to $ 276 million.

Black Ubiquiti Networks router on a wooden shelf.

IMAGE SOURCE: UBIQUITI NETWORKS.

And that

The thriving business technology segment of Ubiquiti Networks once again led, including the UniFi, mFi and AmpliFi product lines focused on the consumer, with revenues increasing 48.2% year-on-year to $ 194.1 million. Meanwhile, sales of its service provider's technology business dropped a modest 5.6% to $ 113.2 million.

The company also took advantage of the new $ 200 million share repurchase program that began in November, and bought about 357,000 shares for $ 34.7 million in the last three months.

Now what

Ubiquiti reiterated its long-term goal for the gross margin to remain between 45% and 50% (stood at 45.6% this quarter), although the company also repeated its warning that the metric could fall between 42% and 45% in The short term while working to mitigate against contrary trade winds.

In any case, Ubiquiti Networks is still hoping that its full results for the 2019 fiscal year will come within the guidance provided above for revenues of $ 1.1 billion to $ 1.2 billion and earnings per share of $ 4.00 to $ 4.80. Taking into account that the company has now exceeded the expectations of each quarter during the past year, I suspect that few investors will be surprised if their full fiscal year results end up near the top of those ranges.

Steve Symington has no position in any of the actions mentioned. Motley Fool owns shares and recommends Ubiquiti Networks. The Motley Fool has a disclosure policy.


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