CommScope and ARRIS struggle due to lower spending by cable and telecoms

CommScope and ARRIS have revealed that both companies have struggled to achieve revenue growth due to reduction in demand from its cable and telecom network customers in several regions.
CommScope for in-buildingCommScope has completed the acquisition of ARRIS. But the company did not include the revenue of ARRIS during the first quarter of 2019.

CommScope reported sales of $1.10 billion (–1.9 percent) and a net loss of $2.3 million (net income of $33.7 million) in the first quarter of 2019.

CommScope said significant declines in capital spending by certain cable providers will have negative impact on ARRIS.

CommScope CEO Eddie Edwards said: “We are moving quickly to combine ARRIS, Ruckus and CommScope in a way that positions us for long-term success.”

CommScope achieved sales growth in the U.S. CommScope reported lower sales in Europe, Middle East and Africa (EMEA) and Asia Pacific regions.

CommScope benefited from the build out of 4G networks partially offset by a decline in Indoor Copper.

CommScope reported revenue of $646.1 million (–4.1 percent) from Connectivity Solutions due to poor demand in EMEA and Asia-Pacific regions, partially offset by a slight increase in North America.

CommScope reported revenue of $453.4 million (+1.5 percent) from Mobility Solutions amid demand in North America, while posting a decline in Asia Pacific.

ARRIS reported revenue of $1.38 billion (–12.4 percent), and operating loss of $45.9 million for the first quarter.

ARRIS posted revenue of $824.2 million (–5.8 percent) from Customer Premises Equipment (CPE), $440.2 million (–18.2 percent) from Network and Cloud (N&C) and $116.9 million (–28.8 percent) from Enterprise (including Ruckus).

ARRIS has posted lower revenue due to a reduction in capital spending by some large North American network operators, a channel inventory draw-down and the impact of transitioning production out of China due to tariffs.

CommScope expects revenue of $2.49 billion – $2.65 billion with operating loss of $124 million – $170 million in the second quarter of 2019.