Telecommunications sector-related exchange traded funds surged on Tuesday after Arista Networks (NYSE: ANET) revealed better-than-expected Q3 results, a stock split, and buyback plans.
Meanwhile, Arista Networks shares jumped 20.4% on Tuesday. ANET makes up 8.8% of IGN’s underlying portfolio, 4.7% of IYZ, and 3.1% of XTL.
Arista Networks reported revenue of $748.7 million for the third quarter, up 23.7% from a year-over-year and 5.8% above the June quarter level, compared to the Street consensus forecast of $737.9 million, Barron’s reports.
“The business continued to perform well in the quarter, exceeding on all key financial metrics, while the team navigates a difficult supply environment,” Arista CFO Ita Brennan said in a statement.
The company also announced a four-for-one stock split to be paid to shareholders of record on November 11, with the stock to trade on a split-adjusted basis on November 18.
In addition, Arista stated that its board approved $1 billion in additional stock repurchases in October, adding to the rally on Tuesday.
“We are experiencing strong demand for our pioneering client to cloud networking portfolio across all of our customer sectors,” said Jayshree Ullal, Arista chief executive, in a statement, according to MarketWatch. “Despite a challenging supply chain environment, I am pleased with our delivery of another record quarter of Arista’s financial results in Q3 2021.”
Looking ahead, Arista projected revenue to grow about 30% in 2022, compared to the 13% pace that analysts had been previously expecting, the Wall Street Journal reports. While Arista did not specifically cite the company previously known as Facebook as the reason for the upgraded outlook, Meta Platforms has been second only to Microsoft among Arista’s largest customers in the past two years. The forecast followed Facebook’s surprise announcement of a 66% jump in capital expenditures for 2022.
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