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Arista (ANET) Beats on Q2 Earnings, Revenues Up Y/Y

Arista Networks Inc. ANET reported earnings (including stock-based compensation) of $1.10 per share in second-quarter 2017, which comfortably surpassed the Zacks Consensus Estimate of 79 cents.

Excluding stock-based compensation but including all other one-time items, non-GAAP earnings was $1.34 per share, which surged 81.1% on a year-over-year basis.

Revenues of $405.2 million soared 50.8% from the year-ago quarter. The figure was better than management’s guided range of $354–$364 million. Product revenues (87.3% of total revenue) surged 50.2% to $353.9 million. Service revenues (12.7% of total revenue) jumped 54.9% to $51.3 million.

Arista expects revenue growth in the current-quarter to moderate sequentially as expenses are likely to grow faster than revenues due to higher investments.

Arista Networks, Inc. Price, Consensus and EPS Surprise

Arista Networks, Inc. Price, Consensus and EPS Surprise | Arista Networks, Inc. Quote

Management stated that gross margins can be negatively impacted due to re-design of the products affected by import ban related to the '945 case, which the company is fighting against Cisco CSCO.

Arista is now using the U.S. contract manufacturer to produce these, which will further negatively impact gross margin.

The stock has gained 79.6% year to date, substantially outperforming the...