Thursday, EXFO Electro Optical Engineering Inc. (EXFO) reported an increase in its earnings for the third quarter, as revenues improved 23.9% from the last year quarter. The company also provided guidance for the fourth quarter.
Net earnings for the third quarter rose to $11.2 million, or $0.16 per share, from $2.6 million, or $0.04 per share, in the same quarter last year. Analysts polled by First Call/Thomson Financial expected earnings of $0.06 per share for the quarter.
The recent quarter earnings included $5.3million for the recognition of previously unrecognized future income tax assets in the United States, an extraordinary gain of $3.0 million related to the recognition of Navtel Communications' future income tax assets in excess of the acquisition price, as well as $0.8 million in after-tax amortization of intangible assets and $0.3 million in stock-based compensation costs.
Quarterly sales increased 23.9% to $48.6 million from $39.2 million a year ago. Analysts' expected revenues of $48.5 million for the quarter.
EXFO said the revenue growth was more than 75% organic, since the acquisitions of Navtel Communications and Brix Networks, which closed approximately one month and two months respectively into the third quarter of 2008, contributed only $2.2 million in total revenue.
Net bookings improved 16.0% year-over-year to $50.7 million for the quarter for a book-to-bill ratio of 1.04, excluding the backlogs of Brix Networks and Navtel Communications at their acquisition dates. Net bookings in the year-ago quarter were $43.7 million.
For the fourth quarter, the company expects net earnings per share between break-even and $0.04, with sales in the range of $49.0 million and $53.0 million. Net earnings include $0.02 per share in stock-based compensation costs and after-tax amortization of intangible assets. The outlook includes a full contribution from Brix Networks and Navtel Communications in the fourth quarter.
Analysts anticipate earnings of $0.07 per share, on revenue of $54.7 million for the fourth quarter.
EXFO closed Thursday's regular trading session at $4.81, down $0.19 or 3.80%.
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