Aviat Provides Preliminary Quarterly Results, Updates Full-Year Outlook
Tuesday, May 07, 2019 | Comments

Aviat Networks provided preliminary fiscal 2019 third-quarter results and an update to its fiscal 2019 full-year outlook.

The company previously provided guidance for the second half of fiscal 2019, noting the fourth quarter would come in better than the third quarter based on timing of orders and anticipated revenue recognition. That remains the case, but more prominent, as the company's fiscal 2019 third quarter was adversely impacted by component shortages related to its North America business, a slowdown in spending in Africa, as well as a contract delay with an existing customer in North Africa.

The outlook in North America remains strong, the component situation has been corrected and the company anticipates significant growth in this region in its fiscal 2019 fourth quarter. Moreover, the company is adjusting its near-term outlook in Africa given the current spending environment, which is expected to result in lower revenue than previously anticipated in the fiscal 2019 fourth quarter. However, the company still anticipates year-over-year growth and improved profitability.

Fiscal 2019 third-quarter revenue is anticipated to be about $54 million, lower than expected because of the factors mentioned. GAAP and non-GAAP gross margins for the fiscal 2019 third quarter are both anticipated to be about 30%, representing a year-over-year improvement.

Fiscal 2019 third-quarter GAAP operating expenses and non-GAAP operating expenses are expected to be approximately $19 million and $18 million, respectively, both representing year-over-year improvements. As a result, Aviat anticipates it will report a GAAP operating loss and non-GAAP operating loss of about $2.5 million and $1.5 million, respectively. The company also expects positive GAAP net income attributable to Aviat Networks for the fiscal 2019 third quarter related to the partial release of a U.S. tax valuation allowance based on current and projected profitability in North America.

The company is expecting a strong fiscal 2019 fourth quarter, both on the top and bottom line with North America a key driver of the year-over-year improvement. Aviat expects fiscal 2019 fourth quarter revenue to be in the range of $66 million to $71 million. For the full fiscal year, Aviat anticipates revenue of about $246 million to $251 million.

"Our bottom-line performance is expected to improve for the third year in a row," said Michael Pangia, president and CEO of Aviat Networks. “While expectations on the top-line have tempered near-term given the spending environment in Africa, our business in North America continues to be very strong and we're well-positioned for new business in the coming quarter and into next fiscal year. Further, our cash position is expected to increase by approximately $4.5 million in the fiscal 2019 third quarter, and our balance sheet continues to strengthen. We look forward to providing further updates on our results, outlook and opportunities that are developing for us on a global basis.”

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