Arista Networks Stock Tumbles in Late Trading After Reporting Earnings

Core Insights - Arista Networks reported third-quarter revenue of $1.81 billion, a 7% year-over-year increase, exceeding analyst expectations [1][3] - Net income for the third quarter was $747.9 million, or $2.33 per share, up from $545.3 million, or $1.72 per share, a year earlier [1] - Despite strong profits, the company's gross margin decreased to 64.2% from 64.9% in the previous quarter, with expectations for further decline in the fourth quarter [2] Revenue and Earnings Forecast - For the fourth quarter, Arista forecasts revenue between $1.85 billion and $1.9 billion, which is above consensus estimates [3] - Analysts had anticipated a 28% growth in the fourth quarter, driven by increased cloud spending due to AI demand [3] Stock Split Announcement - Arista announced a 4-for-1 stock split to enhance stock accessibility for investors, with trading set to begin on December 4 [4] - The stock split will reduce the price of each share by a factor of four, but will not affect the total value of investors' holdings [4] Market Reaction - Following the earnings report, Arista's shares fell more than 7% in extended trading, despite being up approximately 83% for the year prior to the announcement [5]