Anaren Inc. (NASDAQ: ANEN) Revenue Growth Discussed
Anaren Inc. (NASDAQ: ANEN) Revenue Growth Discussed
Anaren (NASDAQ: ANEN) released its unaudited earnings report for the fiscal 2013 second quarter ended December 31, 2012 on January 22, 2013. The company reported net sales of $38 million, showing a 6.3 percent increase when compared to the corresponding quarter of the prior fiscal year. This shows significant improvement relative to performances in comparable quarters of the past four years. According to Anaren’s Chairman, Lawrence A. Sala, the impressive numbers are attributable to a favorable product mix, operational efficiencies, and cost reductions. He also noted that profitability improved in both of Anaren’s business segments, the Wireless Group and Space & Defense Group. Mr. Sala emphasized improved profitability in the company’s report. This is a good thing. After all, it’s what businesses are all about and investors should be on the lookout for this metric before putting their hard-earned money into any stock.
Anaren’s Revenue growth
Revenue growth is important. It is the key indicator that tells you the rate at which a business is expanding. It also, to some extent, talks about what future stock price will look like. So, how is Anaren doing in this area?
Well, for the quarter ended December 31, 2012, Anaren’s revenue growth was 6.34 percent year-over-year. This isn’t a record revenue growth for the company, but it does show significant improvement from previous numbers, at least for the past four years. Anaren’s year-over-year revenue growth for fiscal 2012 second quarter was -17.74 percent. Those of 2011 and 2010 were 5.91 percent and -1.02 percent respectively.
Perhaps further improvement in revenue will be experienced if the forecasted sales increase in the Space & Defense Group segment is realized in the second half of the fiscal year. This expected sales increase, according to management, is because of the increased rate of production of the TPQ-53 radar program. In addition, execs noted that the company continues to experience new business opportunities related to space and radar. Generally, the bigger the business opportunities a company has, the faster the company will grow. This growth will, in turn, have a positive effect on the company’s stock.
It’s difficult to judge Anaren’s performance on revenue growth basis, even after figures from previous years have been examined. To make things easier, let’s see how Anaren’s direct competitor, Aeroflex Holding Corporation (NYSE: ARX) is fairing on basis of revenue growth. For the past six quarters, Aeroflex has had negative revenue growth value, both on a sequential and year-over-year basis. For the fiscal 2013 second quarter, Aeroflex reported about 9.5 percent sales drop. This will have an effect on the revenue growth of the company. This sort of number tells us the industry is going through a tough time. Look up the pattern of revenue growth in this industry and you’ll see just what I mean.
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Revenue is a good indicator. I’d like to see cash flow. Cash is king as they say. Also it would be better how the company manages its costs and margins. It says a lot about management.
Just be careful until Congress pulls its collective head out of its…well, you know. Defense and space technology translates to “heavily reliant on government spending,” and even if the sequester isn’t allowed to happen, it’s difficult to predict what will happen to budgets. With Republican control of the House and Democratic control of the Senate, progress is dependent on an end to partisan bickering. Yes, I actually typed “an end to partisan bickering”; you can stop laughing now.
I’m always nervous when companies are reliant on government spending. Partisan bickering is always bad for business.
This company is obviously profitable — the main essence of doing business. And it is also expanding. “Smart” investors should keep an eye on this.
Until sequestration issues have been settled, will give this a pass but continue to watch. The largest employer in a radius of five counties here is an MCAS base with NADEP facility. Go 2 counties south of me and the world’s largest Marine Corps Base employs thousands of civilians who also work for contractors. Sequestration is a real issue here and the companies that have DOD contracts rely on civilians to do the work. I grew up in the Marine Corps, have family members who work for the DOD and have held a DOD contract. I have to agree with Dan on this one. For any company that deals with the government, sequestration is a viable issue and needs to be take into consideration.
Good financial stability as you can see with a current ratio of 7.83 but earnings are expected to fall 44% this year. Most of that could be due to the likely spending cuts from the government which look to be really gaining steam on March 1st.
Well, March 1st is already here. Let’s hope the hydra-headed monster is not unleashed