CommScope sees rising gross sales, continued provide chain pressures

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

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

By way of enterprise unit outcomes, CommScope reported that its enterprise segments with the strongest development have been its Connectivity and Cable Options (CCS) enterprise, which noticed web gross sales up almost 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 development from Ruckus Networks; and its Outside Wi-fi Networks (OWN) enterprise, which noticed web gross sales rise almost 7% year-over-year. Web gross sales in its Home based business unit dropped by 5.7% due ot declines in broadband house options, the corporate mentioned.

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

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

CommScope mentioned it “has seen a major improve in prices that has negatively impacted its outcomes of operations,” plus a restricted accessible provide of reminiscence units, capacitors and chips which are impacting its lead instances—so it’s elevating costs and sustaining increased 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, power costs and worry about an financial slow-down might affect the timing and quantity of capital spending by its clients in 2023.”