Extreme Networks Inc. (NASDAQ: EXTR) reported its fiscal third-quarter financial results after the markets closed on Tuesday. The company said that it had $0.16 in earnings per share (EPS) on $262 million in revenue, versus consensus estimates from Thomson Reuters of $0.21 in EPS on revenue of $268.32 million. In the same period of last year, it posted EPS of $0.10 and $148.66 million in revenue.
In terms of its segments for the quarter, the firm reported:
- Product revenues increased 83% year over year to $203.5 million.
- Service revenues increased 54% year over year to $58.5 million.
Looking ahead to the fiscal fourth quarter, the company expects to see EPS in the range of $0.16 to $0.23 and revenues between $277 million and $287 million. The consensus estimates call for $0.29 in EPS on $288.46 million in revenue for the coming quarter.
On the books, Extreme Networks cash and investments ended the quarter at $105.3 million, a decrease of $22.9 million from the second quarter and a decrease of $12.0 million from the third quarter of last year, driven primarily by the funding of the acquisition of the Campus Fabric and Data Center businesses.
Ed Meyercord, president and CEO of Extreme Networks, commented:
Finally, our recent acquisitions are meaningfully strengthening our brand, our competitive position and our technology differentiation in the market evidenced by significant growth in our pipeline, which includes many cross-selling opportunities. In our fourth fiscal quarter, we expect to deliver continued year-over-year organic growth in our core Extreme business with less seasonality in our fourth fiscal quarter than prior years due to revenue trends from our acquired assets. After reviewing our pipeline we anticipate we will remain on track to meet or exceed our annual target of $430 million of newly acquired revenue from our recent acquisitions. Looking out into fiscal 2019, we remain on track to grow revenue 3 to 5% in the combined portfolio as compared to our second-half 2018 run-rate.
Shares of Extreme Networks closed Tuesday at $11.75, with a consensus analyst price target of $16.70 and a 52-week range of $8.40 to $15.55. Following the announcement, the stock was down about 28.5% at $8.40 in early trading indications Wednesday.