CommScope lowers revenue outlook, plans cost cutting

CommScope has revealed that it’s expecting lower income in the second quarter and the year 2018 due to price reductions at certain large North American operators expected in 2018 and 2019, as well as higher input costs.

CommScope did not reveal the name of its telecom operator customers in North America. AT&T, Verizon, T-Mobile and Sprint dominate the U.S. wireless market.

The telecom infrastructure company is taking action to reduce pressure from customer price changes through additional cost reduction initiatives, including manufacturing optimization, value engineering projects and additional product in-sourcing. There is no indication about any possible job cut at CommScope.
CommScope revenue outlook 2018CommScope is targeting revenue of $1.21 billion – $1.26 billion with operating income of $151 million – $166 million in the second quarter of 2018.

CommScope is aiming for revenue of $4.675 billion – $4.825 billion with operating income of $545 million – $590 million in 2018.

CommScope reported 1.5 percent drop in sales to $1.12 billion with net income of $34 million in the first quarter of 2018.

CommScope has posted revenue of $607.5 million (–6.3 percent) in United States, $249.7 million (+7.7 percent) from Europe, Middle East and Africa, $188.6 million (+3.7 percent) from Asia Pacific, $56.1 million (–4.6 percent) in Central and Latin America and $18.6 million (+12.7 percent) in Canada.

Operating income of CommScope in the first quarter of 2018 declined 14 percent to $104 million primarily driven by lower sales volumes, reductions in certain selling prices and higher material costs.

CommScope’s Connectivity Solutions segment sales decreased 1 percent to $674 million.

Mobility Solutions segment sales fell 2 percent to $447 million.

CommScope CEO Eddie Edwards said: “We remain confident in our ability to deliver sales and earnings growth this year, despite higher input costs and expectations for price changes at certain large North American operators.”

“As we move through 2018 and 2019, we are collaborating with these large customers to lower their total cost of ownership with an aim to driving incremental sales opportunities, ensuring we retain our industry-leading position,” Eddie Edwards said.

CommScope said sales declined as growth in the Europe, Middle East and Africa (EMEA) and Asia-Pacific regions was more than offset by lower sales in the U.S. Net sales in most major international regions increased, primarily driven by the 2.4 percent impact of foreign exchange rates.