CommScope posts 13% drop in revenue and net income in Q3

CommScope Q3 2107 revenue
CommScope Holding Company reported 12.8 percent drop in sales at $1.13 billion ($1.29 billion) and dip in net income at $51 million ($94 million) in the third quarter ended September 30, 2017.

CommScope has posted revenue of $595.3 million (–16.4 percent) in United States, $231 million (–1.2 percent) from Europe, Middle East and Africa, $218.6 million (–11.1 percent) from Asia Pacific, $62.2 million (–10.1 percent) in Central and Latin America and $21.7 million (–33.6 percent) in Canada.

CommScope said three customers accounted for > ¾ of revenue decline in of Connectivity Solutions business. The company expects near-term recovery and growth in outdoor network solutions and it’s confident about hyperscale opportunity.

CommScope said one customer accounted for ~ 2/3 of revenue decline in CommScope’s Mobility Solutions. The company said it would bet on FirstNet opportunity in the Us and there’s ongoing progress with metro cells and small cells.
CommScope Q3 regionsCommScope created revenue of $708.7 million (–13.5 percent) from Connectivity Solutions and $420.1 million (–11.5 percent) from Mobility Solutions business.

CommScope CEO Eddie Edwards said: “We are prudently managing costs while still providing our customers with the same world-class differentiated solutions and service. We will continue to take action to increase operational and financial performance, including adjusting pricing on certain enterprise products.”

“As we look ahead to 2018, we expect a return to growth. We are particularly encouraged by our opportunities in North America with wireless and fiber deployments as well as growth within hyperscale data centers,” Eddie Edwards said.

CommScope said its third quarter sales declined in all major geographic regions. Foreign exchange rate changes positively impacted revenue by about 1 percent. Additionally, the year-ago quarter included an extra week of BNS results.

Operating income of CommScope declined 30 percent to $127 million.

CommScope said its Connectivity Solutions segment sales fell 13 percent to $709 million. Modest growth in the Europe, Middle East and Africa region was more than offset by lower sales in the U.S., Asia-Pacific and Latin American regions.

Lower sales at three large customers drove approximately three-quarters of the revenue decline. These customers include a North American service provider, a Southeast Asian service provider and a hyperscale data center customer.

CommScope said Connectivity Solutions operating income declined 32 percent to $71 million, while operating income decreased 26 percent year over year to $139 million, or 20 percent of segment sales.

The decreases in operating income were primarily driven by lower sales volumes, partially offset by lower incentive compensation expense and the benefit of cost reduction initiatives.

CommScope said Mobility Solutions segment sales fell 12 percent to $420 million. Growth in Asia Pacific was more than offset by declines in all other major geographic regions. The decrease is due primarily to a continuation of softness in spending at a certain North American service provider.

CommScope said Mobility Solutions operating income dropped 27 percent to $56 million, while non- adjusted operating income dipped 21 percent to $84 million, or 20 percent of segment sales.

Operating income was impacted by lower sales volumes and unfavorable geographic mix, partially offset by lower incentive compensation expense.

Baburajan K

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