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Aviat (AVNW) to Report Q2 Earnings: What's in the Cards?

Aviat Networks, Inc. AVNW is scheduled to report second-quarter fiscal 2021 results (ended Jan 1, 2021) on Feb 3, after the closing bell. In the previous quarter, the company delivered a positive earnings surprise of 67.6%. Notably, the company pulled off a trailing four-quarter positive earnings surprise of 11.8%, on average.

The Austin, TX-based microwave networking solutions provider is expected to have recorded higher revenues on a year-over-year basis on the back of healthy market dynamics, cost-reduction initiatives and favorable customer mix, coupled with a robust liquidity position, despite the COVID-19 mayhem.

With a resilient business model, the company is likely to have benefited from strong demand for best-in-class broadband connectivity in the rural areas and mission critical networks. Also, higher revenues from private network business in North America, fueled by accretive 5G deployments with an upsurge in software sales might have bolstered Aviat’s profitability. Growing relationship with U.S. Federal Market might have acted as a tailwind as well.

Factors at Play

During the quarter under review, Aviat joined forces with a Hudson Oaks, TX-based Internet service provider — Nextlink Internet — to deploy its WTM 4000 microwave and multi-band platform for enhanced broadband infrastructure in rural America. The deployment will not only augment Nextlink’s fiber presence but also aid several communications service providers to offer low-cost wireless solutions with enhanced experience for commercial and residential subscribers.

The frontrunner in wireless transport solutions also received a multimillion-dollar order from Nextlink for the purchase of Aviat products from its e-commerce platform — Aviat Store — to enjoy the advantages of faster lead times and direct-to-market with improved order-on-demand capabilities. The strategic partnership is well poised to benefit from significant government funding such as the $20B Rural Digital Opportunity Fund to propel technological innovations in the rural regions. These developments are likely to have had a positive impact on the company’s top line in the quarter to be reported.

For the to-be-reported quarter, the Zacks Consensus Estimate for total revenues is pegged at $66 million, which indicates an increase of 17.9% from the year-ago quarter’s reported figure. Adjusted earnings per share are pegged at 91 cents, which suggests a drastic improvement from a loss of 17 cents reported in the year-ago quarter.

What Our Model Says

Our proven model doesn’t conclusively predict an earnings beat for Aviat this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.

Earnings ESP: Aviat’s Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00% as both are pegged at 91 cents.

Zacks Rank: Aviat currently carries a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Aviat Networks, Inc. Price and EPS Surprise

Stocks to Consider

Here are some companies that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:

AGCO Corporation AGCO is slated to release fourth-quarter 2020 results on Feb 4. It has an Earnings ESP of +3.34% and currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Littelfuse, Inc. LFUS is scheduled to release fourth-quarter 2020 results on Feb 3. The company has an Earnings ESP of +5.02% and carries a Zacks Rank #1, at present.

Avantor, Inc. AVTR has an Earnings ESP of +13.33% and a Zacks Rank of 2. The company is set to report fourth-quarter 2020 results on Feb 3.

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