Aruba Networks Inc. (ARUN) reported fiscal fourth-quarter earnings after the closing bell yesterday. The company posted a GAAP net loss of $4.5 million, compared to a net loss of $6.8 million. Excluding certain items, loss per share came in at 4 cents, beating the Zacks Consensus Estimate for a 5-cent loss.

Aruba provides enterprise mobility solution that enables secure access to data, voice and video applications across wireless and wireline enterprise networks. It licenses and sells ArubaOS, a modular and flexible operating system that forms the core of its user-centric network architecture. Aruba is the second largest wireless LAN provider and competes with larger rival Cisco Systems Inc. (CSCO).

The Sunnyvale, CA-based company’s revenue recorded a growth of 10.5% year-over-year and 16% sequentially to $53.3 million, driven by strong demand in the U.S., where it posted 35% sequential growth. The company, which focuses on government, health care and education verticals, added 600 customers during the quarter and continued to derive significant traction from both new and existing customers.

Sales from products expanded 7.2% year over year to $43.4 million, while professional services revenue rose 35.6% to $9.7 million. The company generated about 70% of its sales from U.S. operations, with the remaining coming from international operations.

Aruba’s gross margin remained almost flat year over year and grew 120 basis points (bps) sequentially to 65.2%. The sequential growth was primarily driven by the sales of higher margin 802.11 access points. Total operating expenses increased nearly 2% to $39.7 million mainly on account of higher legal expenses associated with the ongoing patent dispute with Motorola Inc. (MOT). Operating loss came in at $4.2 million, against a loss of $6.8 million in the year-ago quarter.

Cash and equivalents at the end of the quarter was $41.3 million, compared to $37.6 million in the year-ago period. The increased liquidity was primarily the result of a 27.4% year over year reduction in inventories to $8.5 million. The company also stated that Days Sales Outstanding (DSOs) improved to 56 days from 61 days in the year-ago quarter.

Meanwhile, Aruba expects strong bookings to continue moving forward and sees revenue between $54 million and $56 million during the fiscal first-quarter and GAAP earnings per share of approximately 3 cents. The Zacks Consensus Estimate is currently pegged at a loss of 3 cents per share, which has remained steady over the past 3 months. Moreover, the Zacks Consensus Estimate for the fiscal year ending July 2010 presently stands at an 8-cent loss, which has improved by a penny over the past month.
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