Arris Faces Market Headwinds

Arris expects earnings in the first quarter of 2015 to come in below Wall Street estimates as the broadband and video equipment and software supplier faces slower spending by telcos and general uncertainty caused by a flurry of M&A activity involving some of its top customers — Comcast, Time Warner Cable, DirecTV and AT&T.

Piling on to that is Verizon Communications, another big Arris customer, which is in the process of selling off a chunk of its wired operations to Frontier Communications.

On the financial end, Q4 revenues were $1.26 billion, up from $1.19 billion in the year-ago quarter, and down from $1.4 billion in the previous period. For the first quarter of 2015, Arris said it expects earnings of 40 cents to 45 cents per share on revenues of $1.20 billion to $1.24 billion, while analysts were expecting 55 cents on $1.24 billion. Arris’s fourth quarter earnings beat estimates and revenues were in-line. Arris shares were down 83 cents (2.98%) to $26.98 each in after-hours trading.

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