Arista Networks reported March-quarter earnings and revenue that topped estimates despite supply chain constraints. Arista stock fell as revenue guidance for the current second quarter came in well above expectations.
The maker of computer networking gear reported first earnings after the market close on Monday. ANET stock fell 1.5% to 116.49 in morning trades on the stock market today.
For the three months ended March 31, Arista earnings rose 33% from a year earlier to 84 cents per share, topping estimates of 81 cents. Revenue grew 31% to $877 million, beating forecasts for $856 million.
A year earlier, Arista earnings were 63 cents on revenue of $668 million.
ANET Stock: Guidance Tops Expectations
For the June quarter, Arista said it expects revenue of $975 million at the midpoint of guidance. Analysts had predicted revenue of $917 million. Arista said it expects gross margins of 60% to 62% in the June quarter. It predicted operating margins of 37% to 38%.
"This was an impressive quarter on already-large numbers — particularly considering the supply chain environment and Arista getting hit with accelerating component de-commits later in the quarter," Jefferies analyst George Notter said in a note to clients.
He added: "There's some building skepticism from investors about the durability of their cloud titan growth, particularly if the economy heads into a recessionary environment and advertising metrics slow at accounts like Meta/Facebook."
ANET stock analysts expect higher capital spending by Facebook-parent Meta Platforms to be a growth driver in 2022.
Shares Had Declined 19% This Year
Heading into the earnings report for ANET stock, the computer networking firm had a Relative Strength Rating of 92 out of a best-possible 99.
Shares had declined 19% in 2022, and ANET stock now holds an entry point of 148.67.
Arista sells switches that speed up communications among racks of computer servers packed into data centers. Its primary customers have been internet companies.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.
