Aruba Networks Inc. (ARUN) Thursday reported a slip to a loss in the third quarter, hurt mainly by stock-based compensation expenses and other costs, as well as income tax provisions. The company's adjusted profit, which exclude items, came in short of Wall Street estimates, as did sales.
Shares of Aruba tanked 16 percent in after-hours trade on the Nasdaq, following the announcement of results.
"While we are disappointed with our third quarter financial results and are cautious about the near-term spending environment, the secular trends driving our markets are strong," said CEO Dominic Orr.
The results were somewhat expected as Aruba earlier this month said third-quarter sales were impacted by weak customer orders in April, amid a sluggish global economy, and its shares tumbled at that time.
Aruba provides network access solutions for the mobile enterprises.
The Sunnyvale, California-based Aruba posted a quarterly net loss of $20 million or $0.18 per share, compared with net income of $6 million or $0.05 per share last year.
Excluding items, adjusted earnings for the quarter were $14 million or $0.11 per share, compared with adjusted earnings of $19 million or $0.16 per share in the prior year.
On average, 25 analysts polled by Thomson Reuters expected earnings of $0.15 per share for the quarter. Analysts' estimates typically exclude special items.
Revenues for the third quarter grew 12 percent to $147 million from $132 million a year ago. Analysts had consensus revenue estimate of $149.76 million for the quarter.
Total operating expenses increased to $105.6 million from $89 million in the corresponding quarter last year.
Income tax expense for the quarter totaled about $18 million, compared with a benefit of $3 million in the prior year.
Separately, Aruba said it has acquired privately-held Meridian Apps Inc. The financial terms of the deal were not disclosed.
With the acquisition, Aruba enables new location-based services by combining its unique, network-based contextual information about users, devices and applications with Meridian's Wi-Fi based wayfinding solution for smartphones and tablets.
Aruba shares closed Thursday's regular trade at $17.61, up $0.03 or 0.20%, on a volume of 6.9 million shares. In after hours, the stock plummeted $2.81 or 15.96%, to trade at $14.80.
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