& cplSiteName &

CommScope Suffers Broadband Slump

Alan Breznick
2/21/2014
50%
50%

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
albreznick
50%
50%
albreznick,
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. 
albreznick
50%
50%
albreznick,
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? 
From The Founder
Cisco's Conrad Clemson, recently promoted to head up the company's Service Provider Apps & Platforms developments, talks to Light Reading's Founder and CEO Steve Saunders about how he's bringing cloud video, mobile and virtualization together to empower network operators.
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
What WTTX Can Deliver

2|23|17   |     |   (0) comments


Mohamed Madkour explains the benefits of WTTX while Dimitris Mavrakis discusses the challenges of delivering home broadband access.
LRTV Custom TV
Huawei on Mobile Broadband

2|23|17   |     |   (0) comments


Mohamed Madkour shares his vision on MBB for the next three years.
LRTV Custom TV
Analysys Mason Talks About the Future of Digital Operations

2|23|17   |     |   (0) comments


The future of digital operations has three key aspects: 1. Highly automated operations for both service and network; 2. Highly converged BSS/OSS for business and resources; 3. Highly merged management and control for real-time cloud native operations.
LRTV Interviews
Software Trends in the Telecom Sector

2|23|17   |   03:40   |   (0) comments


Heavy Reading senior analyst James Crawshaw talks with Telecoms.com Editorial Director Scott Bicheno about trends and developments in the telecoms software sector and what to expect at MWC 2017.
LRTV Custom TV
Huawei's Pre-MWC Analyst Briefing 2017 Highlights

2|22|17   |     |   (0) comments


Huawei shares its vision for this year's MWC.
LRTV Interviews
MWC17: 5G, Cloud RAN & More

2|21|17   |   04:35   |   (0) comments


Ovum Senior Analyst Julian Bright talks to Scott Bicheno from Telecoms.com about all things MWC, including Cloud RAN, Huawei's pitch to the industry and the road to 5G.
LRTV Interviews
MWC 2017's Key 2-Letter Terms

2|20|17   |   08:29   |   (1) comment


5G, AI, VR... these are just some of the two-letter terms that will dominate show-floor chat at MWC 2017 in Barcelona, according to these two blow-hards (a.k.a. Scott Bicheno of Telecoms.com and Light Reading's Ray Le Maistre). And then there's PB...
LRTV Interviews
Key Trends for Mobile Operators in Developing Markets

2|20|17   |   06:37   |   (0) comments


Ovum's Matthew Reed talks to Scott Bicheno from Telecoms.com about the challenges and opportunities facing mobile operators in the developing markets of Africa and the Middle East.
LRTV Documentaries
YouTube Takes on Facebook Live-Streaming

2|17|17   |     |   (0) comments


Popular 'YouTubers' will be the first to get the new service on their smartphones. You have been warned.
LRTV Custom TV
Open Source NFV/SDN Automation

2|17|17   |   05:54   |   (0) comments


AT&T ECOMP (Enhanced Control, Orchestration, Management and Policy) code is transitioning into the Linux Foundation for placement into open source. In this video, Carol Wilson provides an update on the maturation of open source ECOMP and meets with industry leaders from AT&T, Bell Canada, Orange, Linux Foundation and Amdocs to discuss what this means for the ...
LRTV Documentaries
Uber & NASA Collaborate on Flying Car Project

2|16|17   |     |   (0) comments


Is Uber for real? Well, it's hired NASA engineer Mark Moore to lead the project, and he wouldn't come cheap.
LRTV Documentaries
Zuckerberg Tries Out the Oculus Rift VR Glove

2|15|17   |     |   (0) comments


Facebook CEO shows off a new way to interact with the Oculus Rift virtual reality headset: an Oculus glove.
Upcoming Live Events
March 21-22, 2017, The Curtis Hotel, Denver, CO
March 22, 2017, The Curtis Hotel, Denver, CO
March 22, 2017, The Curtis Hotel, Denver, CO
May 15-17, 2017, Austin Convention Center, Austin, TX
May 15, 2017, Austin Convention Center - Austin, TX
June 6, 2017, The Joule Hotel, Dallas, TX
All Upcoming Live Events
Infographics
With the mobile ecosystem becoming increasingly vulnerable to security threats, AdaptiveMobile has laid out some of the key considerations for the wireless community.
Hot Topics
Broadband Has a Problem on the Pole
Mari Silbey, Senior Editor, Cable/Video, 2/21/2017
Is the Time Right for a Cisco/Ericsson Wedding?
Ray Le Maistre, Editor-in-chief, 2/17/2017
Uber's HR Nightmare: Company Investigates Sexual Harassment Claims
Sarah Thomas, Director, Women in Comms, 2/21/2017
Verizon to Start Fixed 5G Customer Trials in April
Dan Jones, Mobile Editor, 2/22/2017
Nice to See at Least One CSP Taking My Advice
Mitch Wagner, Editor, Enterprise Cloud, 2/17/2017
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
Light Reading founder and CEO Steve Saunders chats with Sportlogiq CEO Craig Buntin about sports data analysis.
Eyal Waldman, CEO of Mellanox Technologies, speaks to Steve Saunders, CEO of Light Reading, for an exclusive interview about the 100 GB cable challenge, cybersecurity and much more.
Animals with Phones
No One Likes This Click Here
Take a hint!
Live Digital Audio

Playing it safe can only get you so far. Sometimes the biggest bets have the biggest payouts, and that is true in your career as well. For this radio show, Caroline Chan, general manager of the 5G Infrastructure Division of the Network Platform Group at Intel, will share her own personal story of how she successfully took big bets to build a successful career, as well as offer advice on how you can do the same. We’ll cover everything from how to overcome fear and manage risk, how to be prepared for where technology is going in the future and how to structure your career in a way to ensure you keep progressing. Chan, a seasoned telecom veteran and effective risk taker herself, will also leave plenty of time to answer all your questions live on the air.