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Viavi (VIAV) Beats Q4 Earnings Estimates on Top-Line Growth

Viavi Solutions Inc VIAV reported impressive fourth-quarter fiscal and financial year 2022 results primarily driven by a strong performance in the NSE business segment and an improved year-over-year performance of the OSP segment. Both the bottom line and the top line beat the Zacks Consensus Estimate and increased year over year.

Bottom Line

On a GAAP basis, net income in the quarter was $16.5 million or 7 cents per share compared with $3.3 million or 1 cent per share in the year-ago quarter. The year-over-year improvement was primarily attributable to top-line growth.

Non-GAAP net income was $55.8 million or 24 cents per share compared with $52.5 million or 22 cents per share in the prior-year quarter. The bottom line beat the Zacks Consensus Estimate by a penny.

Income from operations in fiscal 2022 stood at $185 million up 30.1% from the previous year. In fiscal 2022, net income per share stood at 7 cents down 75.9% from the previous year.


Viavi Solutions Inc. Price, Consensus and EPS Surprise

Viavi Solutions Inc. price-consensus-eps-surprise-chart | Viavi Solutions Inc. Quote


Quarterly total revenues grew 7.8% year over year to $335.3 million. The top line surpassed the consensus estimate of $322 million. The results reflect a combination of strong operating performance and improving capital structure. Revenues in fiscal 2022 were $1,292.4 million, up 7.8% from the previous year. In fiscal 2022, NSE (Network and Service Enablement) generated record revenues of $949.1 million, up 13.3% year over year and within the range of its long-term goal. OSP (Optical Security and Performance Products) declined 4.9% to $343.3 million due to COVID-19 pandemic related supply chain issues and inflationary pressure.

Segment-wise, revenues from Network Enablement (NE) were up 4.5% from the year-ago quarter to $222.2 million, driven by strong demand of its wireless and optical lab and production products. Service Enablement (SE) revenues grew 0.8% to $24 million, led by an improved product mix. OSP revenues increased 19.8% year over year to $89.1 million due to better-than-expected demand for anti-counterfeiting products during the quarter.

The revenues from America (38.7% of total revenues during the fourth quarter fiscal 2022) stood at $129.7 million up 17.9% year over year. The revenues from Asia-Pacific (38.7%) stood at $129.9 million, up 25.3% year over year. The revenues from EMEA (22.6%) stood at $75.7, down 22.1% year over year.

During the quarter, the Non-GAAP gross margin stood at 62.5% up 50bps from the year ago quarter. The Non-GAAP operating margin stood at 21.3% up 50 bps from the year ago quarter.For the fiscal year 2022, the Non-GAAP gross margin stood at 62.6% down 10 bps from the previous year. The Non-GAAP operating margin stood at 22.2% up 110 bps from the previous year.

Cash Flow & Liquidity

During fiscal 2022, Viavi generated $178.1 million of cash from operating activities, down $65.2 million from $243.3 in the year-ago period. The reduction was a result of timing of payroll and inventory related payables. As of Jul 2, 2022, the company had $559.9 million in cash and cash equivalents with $616.5 million of long-term debt.

Q1 Guidance

For the first quarter of fiscal 2023 (ending Oct 1, 2022), Viavi expects revenues in the range of $317-$331 million. Non-GAAP earnings are estimated in the band of 22-24 cents per share.

Zacks Rank & Stocks to Consider

Viavi currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

First Bancorp. FBP, sporting a Zacks Rank #1, delivered an earnings surprise of 17.1%, on average, in the trailing four quarters. Over the past year, the stock has risen 27.4%.

Earnings estimates for the current year have moved up 16.8% since August 2021. First Bancorp operates in six segments – Commercial and Corporate Banking, Mortgage Banking, Consumer Banking, Treasury and Investments, United States Operations and Virgin Islands Operations.

SP Plus Corporation SP, sporting a Zacks Rank #1, is another key pick for investors. It delivered an earnings surprise of 15.7% in the previous quarter and a stellar earnings surprise of 19.5%, on average, in the trailing four quarters. SP Plus operates in Commercial and Aviation segments. It provides mobility solutions, parking management, ground transportation, baggage, and other ancillary services in North America.

Earnings estimates for the current year have moved up 16.9% since August 2021.

Chewy, Inc. CHWY has a Zacks Rank #1. The Zacks Consensus Estimate for Chewy current-year earnings has been revised downward by 194.6% since August 2021.

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