Extreme Networks Earnings: Here’s Why Investors Like These Results

Extreme Networks Inc. (NASDAQ:EXTR) delivered a profit and beat Wall Street’s expectations, AND beat the revenue expectation. The revenue beat is a positive sign to shareholders seeking high growth out of the company. Shares are up 2.71%.

Extreme Networks Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share decreased 12.5% to $0.07 in the quarter versus EPS of $0.08 in the year-earlier quarter.

Revenue: Decreased 9.3% to $79.5 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Extreme Networks Inc. reported adjusted EPS income of $0.07 per share. By that measure, the company beat the mean analyst estimate of $0.06. It beat the average revenue estimate of $74.58 million.

Quoting Management: “We are pleased with the significant sequential quarter over quarter growth in revenues and operating income, which is indicative of the strength of our product offering,” said Chuck Berger, president and chief executive officer of Extreme Networks. “Our extensive line of Ethernet switches, reaching from the edge of the campus to data centers, all running on the most robust network operating system in the industry, have strong appeal to customers and partners. That said, we continued to report year over year declines in revenues, which clearly indicates there is much to be done to improve our execution across the board. We have identified the areas where changes are needed and are making solid progress, but it will take several quarters to realize the full benefit of these efforts. Additionally, as in our third fiscal quarter, we were unable to fulfill a significant amount of orders due to reduced inventory levels and lengthening component lead times. We will continue to face these shortages for the first half of the first quarter, but believe we will have caught up with demand as we go into September.”

Key Stats (on next page)…

Revenue increased 16.57% from $68.2 million in the previous quarter. EPS increased 75% from $0.04 in the previous quarter.

Looking Forward: Analysts have a more positive outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has risen from a profit of $0.04 to a profit $0.05. For the current year, the average estimate has moved down from a profit of $0.18 to a profit of $0.16 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)