& cplSiteName &

CommScope Suffers Broadband Slump

Alan Breznick

CommScope is not getting a lot of love from the cable broadband market these days. In its second quarterly earnings report since going public again with a 4,437 million IPO in late October, CommScope Inc. reported net sales of $846.6 million, nearly flat with $848.2 million a year ago.

It also reported adjusted net income of $54 million, or 30 cents per diluted share, up on a total income basis, although down slightly from the year-earlier period on a per share basis. Financial analysts who cover the company generally praised the company's performance for the final quarter and the year, highlighting the gains of its main wireless equipment segment. (See CommScope Settles for Reduced IPO Price.)

But what those healthy overall figures mask is that CommScope's smaller broadband unit suffered at least its second straight double-digit percentage decline in the fall. The company's broadband segment sales dropped to $109 million, down 13% from $125 million in the last quarter of 2012. Worse yet, its broadband unit posted an operating loss of $3 million for the quarter, after registering a $7.5 million gain a year earlier.

The twin declines came after CommScope endured a 16% drop in broadband segment revenues to $125 million in the third quarter. Adjusted net income for the segment fell 69% to $4 million in the summer period on a year-over-year basis.

CommScope blamed the continuing broadband shortfalls primarily on "lower sales volumes and less favorable pricing and mix of products sold." The company, which plays in the cable, fiber, and access network space, hawks such prime products as coaxial cable, fiber cable, cable in conduit, FTTX solutions, and edge QAM devices. In addition, it has been trying to expand into the emerging market for next-gen Converged Cable Access Platform (CCAP) devices along with such established rivals as Cisco Systems Inc. (Nasdaq: CSCO), Arris Group Inc. (Nasdaq: ARRS), and Harmonic Inc. (Nasdaq: HLIT), as well as such startups as Casa Systems Inc. and Gainspeed .

On their earnings call with financial analysts late Thursday, CommScope officials made it clear that they consider such results unacceptable. They said they have been taking steps to turn around the broadband unit's performance, including instituting a series of "cost reduction" programs. They did not disclose whether those programs include employee layoffs.

"We have work to do in broadband," said CommScope President & CEO Eddie Edwards. "We're totally committed to making that happen."

As a result of such steps, CommScope executives said they expect to see the broadband division post better adjusted net income results in 2014. But they don't seem to hold out much hope of a great broadband revival any time soon, just a leveling off of the losses from the smallest and most mature of its three divisions.

Consider the following two examples. First, unlike their counterparts at Harmonic and Arris, who highlighted their progress with CCAP trials and deployments on their latest earnings calls, CommScope executives made no mention of progress on that front despite having debuted two CCAP chassis at the SCTE Cable-Tec Expo show in October, and talking then about MSO field tests and deployments… (See CommScope Seeds New CCAP With MSOs.)

Second, when asked by analysts about the prospects for cable Ethernet PON (EPON) and DOCSIS Provisioning of EPON (DPoE) products -- which the company has promoted heavily in the past -- CommScope executives indicated that they might consider a change in direction later this year. The company introduced optical line terminals (OLTs) and optical network units (ONUs) for both EPON and GPON at the SCTE Cable-Tec Expo show in fall 2012.

"I think that's a work in progress at this point," Edwards said. He added that "the next few months will tell" how far the company should proceed with those products.

— Alan Breznick, Cable/Video Practice Leader, Light Reading

(2)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
User Rank: Blogger
2/28/2014 | 5:07:00 PM
Re: CommScope &^ CCAP
Of course, now that i've said that Commcope will probably announce some major CCAP deal or deploiyment somewhere. They've been almost too quiet about CCAP. We shall see. 
User Rank: Blogger
2/26/2014 | 9:41:49 PM
CommScope &^ CCAP
On the earnings call last week, I got the feeling that CommScope may bug out of the CCAP market now. In fact, I wouldn't be surprised if CommScope decided to sell off its whole broadband unit in a year or two. With the wireless market attracting most of its attention, the company's head and heart just don't seem to be in cable anymore. What do you think? 
Light Reading’s Upskill U is a FREE, interactive, online educational resource that delivers must-have education on themes that relate to the overall business transformation taking place in the communications industry.
Friday, October 21, 1:00PM EDT
Security: Evolving the Data Center
Rasool Kareem Irfan, Head, Telecom & Infrastructure Security Practice, Tata Communications Transformation Services Ltd (TCTS)
Wednesday, October 26, 1:00PM EDT
Security: Tackling DDoS
Gary Sockrider, Principal Security Technologist, Arbor Networks
Friday, October 28, 1:00PM EDT
Security: The Plusses and Minuses of Open Source Software
Nick Feamster, Acting Director, Center for Information Technology Policy, Princeton University
Wednesday, November 16, 1:00PM EST
SDN 101
in association with:
From The Founder
Light Reading today starts a new voyage as part of a larger Enterprise.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
LRTV Custom TV
Next-Generation Technology Beyond DOCSIS 3.1

10|20|16   |     |   (0) comments

At SCTE 2016, Huawei's Liu Jianhua speaks with Alan Breznick for an exclusive interview.
LRTV Custom TV
Hybrid Video Solutions to Change TV, Change Future

10|20|16   |     |   (0) comments

At SCTE 2016, Huawei's Ian Locke speaks with Alan Breznick for an exclusive interview.
LRTV Custom TV
Huawei Future-Oriented Giga Coax Network

10|20|16   |     |   (0) comments

At SCTE 2016, Huawei's Allen Wang speaks with Alan Breznick for an exclusive interview.
LRTV Custom TV
Huawei at SCTE 2016

10|20|16   |     |   (0) comments

Join Alan Breznick of Light Reading and take a sneak peek at the Huawei booth at SCTE 2016.
LRTV Custom TV
Assuring Network Quality in a Rapidly Changing Environment

10|20|16   |     |   (0) comments

As the rate of change and complexity increases in agile networks, the importance of introducing DevOps methodologies for integrating active test and assurance solutions throughout the full service lifecycle becomes critical to ensure that customers are experiencing the service quality they demand. The industry landscape is changing, and software-based test and ...
Telecom Innovators Video Showcase
A10 Networks on Service Providers' Industry Needs

10|20|16   |     |   (0) comments

Light Reading's Steve Saunders hears how A10 enables service providers to accelerate, secure and optimize their application delivery to drive down costs, enhance service availability, and better respond to customer requirements, so they can improve customer satisfaction, monetize their network, and grow revenues.
LRTV Custom TV
New NFV Use Cases for Cable TV

10|19|16   |     |   (0) comments

A large number of NFV use cases are focused on the enterprise domain, looking at virtualization of customer-premises equipment (CPE). To date, there has been little focus on the use cases and business case for virtualization of the video content delivery networks required to deliver unicast and streaming video to consumers. Amdocs commissioned Analysys Mason to ...
Women in Comms Introduction Videos
Meet the Future Workforce: New Faces, Expectations & Motivations

10|19|16   |   5:33   |   (1) comment

Millennials and their younger peers, Gen Z, expect more out of their network and more out of their work. Intel's Lynn Comp shares how the industry can prepare for this new generation of workers.
LRTV Custom TV
ZTE Global Services User Congress 2016 Highlights

10|19|16   |     |   (0) comments

ZTE held its 2nd Global Service User Conference in Dusseldorf on October 13-14. Representatives from network operators, leading industry analysts and ZTE senior expertsattended the event, exploring the best practice in managed services and the vision to transform network operations into the operations center of the future (OpCF) in the software-defined networking ...
LRTV Custom TV
Cliff Grossner on Cloud & Network Synergy From Carrier Service

10|18|16   |     |   (0) comments

Local carriers offer the collaborated cloud and network service that benefits from their understanding of the regulations operating in different vertical markets.
In this interview, Cliff Grossner from IHS Technology talks about how this advanced service can support business agility and flexibility.
LRTV Custom TV
VeEX's Plan for DOCSIS Deployment

10|17|16   |     |   (0) comments

Join VeEX's CEO Cyrille Morelle and Light Reading's Alan Breznick as they discuss VeEX's new products at SCTE 2016 at Philadelphia.
LRTV Custom TV
Smith Micro's Carrier-Grade WiFi Component

10|17|16   |     |   (0) comments

Join Carol Wilson of Light Reading as she interviews the CTO of Smith Micro, Dave Sperling.
Upcoming Live Events
November 3, 2016, The Montcalm Marble Arch, London
November 30, 2016, The Westin Times Square, New York City
December 1, 2016, The Westin Times Square, New York, NY
December 6-8, 2016, The Westin Excelsior, Rome
May 16-17, 2017, Austin Convention Center, Austin, TX
All Upcoming Live Events
Hot Topics
Amazon Unlimited, Alexa, AI & How to Cut Off Google at Its Knees
Brian Santo, Senior editor, Test & Measurement / Components, Light Reading, 10/14/2016
WiCipedia: Following Women on Twitter... and on Stage
Eryn Leavens, Special Features & Copy Editor, 10/14/2016
US Issues Total Flight Ban on Samsung Note 7
Dan Jones, Mobile Editor, 10/15/2016
Oh Snap! Qualcomm Unveils X50, Its First 5G Modem
Dan Jones, Mobile Editor, 10/17/2016
Rogers Still Big on Gig & IPTV
Alan Breznick, Cable/Video Practice Leader, Light Reading, 10/17/2016
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
Join us for an in-depth interview between Steve Saunders of Light Reading and Alexis Black Bjorlin of Intel as they discuss the release of the company's Silicon Photonics platform, its performance, long-term prospects, customer expectations and much more.
There's no question that, come 2020, 5G technology will turn the world's conception of what mobile networking is on its head. Within the world of 5G development, Dr. ...
Animals with Phones
Live Digital Audio

A vital part of increasing the number of women in comms is transforming the ways companies can support and empower women. While progressive company policies that support both men and women in achieving work-life balance are a step in the right direction, creating a company culture that supports those policies can at times be more challenging.

During this show, we'll talk to Lynn Comp, Senior Director of Industry and Sales Enabling (ISE) in the Network Platforms Group at Intel, about why those challenges exist and how companies can overcome them. She'll provide insight into how Intel has worked to create a culture that supports work-life balance, and provide steps and guidance for other companies wishing to do the same. We will also leave plenty of time to get your questions answered live on the air.