CommScope sees rising gross sales, continued provide chain pressures

CommScope reported larger gross sales and an enchancment in income in comparison with final yr’s third quarter, though the corporate stated that it’s being hampered by element and supplies shortages which are impacted its lead instances and costs.

Internet gross sales for the third quarter of 2022 had been up 13.1% year-over-year to $2.38 billion, and CommScope reported income of $22.9 million in comparison with a lack of $124 million within the year-ago interval.

When it comes to enterprise unit outcomes, CommScope reported that its enterprise segments with the strongest progress had been its Connectivity and Cable Options (CCS) enterprise, which noticed web gross sales up practically 28% to $1 billion; its Networking, Clever Mobile and Safety Options (NICS) unit, with web gross sales up 24.5% from the identical time final yr, as a result of progress from Ruckus Networks; and its Outside Wi-fi Networks (OWN) enterprise, which noticed web gross sales rise practically 7% year-over-year. Internet gross sales in its Home-based business unit dropped by 5.7% due ot declines in broadband house options, the corporate stated.

Regardless of the strong outcomes, traders nonetheless despatched the corporate’s inventory tumbling 25% by the shut of the markets on Thursday.

CommScope stated that pandemic impacts have receded, however now it’s coping with the aftermath: Improve in demand, but in addition supplies and element shortages, elevated logistical prices, pricing volatility and inflation.

CommScope stated it “has seen a big improve in prices that has negatively impacted its outcomes of operations,” plus a restricted out there provide of reminiscence gadgets, capacitors and chips which are impacting its lead instances—so it’s elevating costs and sustaining larger stock ranges. Whereas the corporate expects world provide chain points to enhance within the fourth quarter of the yr, it additionally says that some shortages will proceed into 2023, and “rising rates of interest, vitality costs and worry about an financial slow-down may influence the timing and quantity of capital spending by its clients in 2023.”