Arista Networks sees fourth-quarter revenue above estimates on steady demand

Arista Networks

07/11/2024 22:40

Nov 7 (Reuters) - Arista Networks  ANET.N  projected
fourth-quarter revenue above Wall Street estimates on Thursday,
as the growing foot print of data centers amid an AI boom lifted
demand for its networking equipment.
    The Santa Clara, California-based company forecast revenue
between $1.85 billion and $1.90 billion for the current quarter,
compared with analysts' average estimate of $1.81 billion,
according to LSEG data.
    Still, shares of the company were down 6% in extended
trading, having surged 83% this year on the back of a surge in
demand for artificial intelligence technologies. 
    Companies have ramped up investments in AI technologies
which require heavy computing power, creating a spike in demand
for data centers, which use Arista's products such as Ethernet
switches and routers. 
    Arista has said it is benefiting from its enterprise
customers refreshing networking systems as they expand data
center capacity rapidly.
    Peer Juniper Networks  JNPR.N  last week also topped
estimates for quarterly revenue and profit, powered by healthy
demand from cloud computing companies.  
    Arista also said its board has approved a four-for-one stock
split to make its common shares accessible to a broader base of
investors. Trading on a split-adjusted basis will be effective
prior to the market open on Dec. 4.
    Arista posted a profit of $747.9 million, or $2.33 per
share, for the third quarter ended September, up from $545.3
million, or $1.72 per share, a year earlier. Adjusted earnings
of $2.40 per share came in above estimates of $2.08. 
    Revenue rose 7.1% to $1.81 billion, beating estimates of
$1.74 billion. 
    Its adjusted gross margin of 64.6% slowed down from 65.4% in
the second quarter, but rose from the 63.1% a year earlier.

 (Reporting by Deborah Sophia in Bengaluru; Editing by Maju
Samuel)
 ((DeborahMary.Sophia@thomsonreuters.com;))