CommScope
Holding stock cratered Monday after the communications-infrastructure provider reduced its earnings outlook, reflecting continued soft demand from the telecom sector.
CommScope stock (ticker: COMM) has plunged 42%, and are now off 80% year to date.
The company said it now sees third-quarter sales of $1.6 billion, with core sales of $1.35 billion, which excludes the company’s home-networking segment, which it has agreed to sell. Street consensus had called for $2 billion in total sales.
CommScope sees a GAAP loss for the quarter of $829 million, including $895 million in noncash impairment charges, and core adjusted Ebitda, or earnings before interest, taxes, depreciation, and amortization, of $246 million.
CommScope now projects full-year 2023 core adjusted Ebitda of $1 billion to $1.05 billion, down from a prior forecast for $1.15 billion to $1.25 billion.
The company said results continue to be affected by lower order rates due to high customer inventories, an uncertain macroeconomic environment, and slower service-provider capital spending. CommScope CEO Chuck Treadway said in a statement that the company expects the softening demand environment to continue into the first half of 2024, affecting both revenue and profitability.
The CommScope warning is just the latest in a series of earnings warnings and disappointing results from others in the telecom-equipment sector, such as
Ericsson
(ERIC),
Adtran Holdings
(ADTN),
Belden
(BDC),
A10 Networks
(ATEN), and
Cambium Networks
(CMBM).
CommScope will report detailed financial results on Nov. 9.
Write to Eric J. Savitz at [email protected]
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