Transmode Reports Q3 Gains
CEO's Statement: Profitable growth and continued investments Sales increased by over 8% in the third quarter adjusted for exchange rate fluctuations. Our gross margin was nearly 51%, and we achieved an operating margin of nearly 18% despite increased product development and sales initiatives, which are part of the company's growth strategy.
Transmode's growth in EMEA, of over 18%, was above our expectations. Growth in the quarter was driven by shipments within Europe, however regional order intake was negatively affected in the quarter by the merger of two of our major customers. This merger is now complete and our commercial relationship is normalized, but due to the negatively affected order intake in the third quarter, sales will be affected in the fourth quarter.
In APAC, we're continuing to report high growth year on year. Sales are driven by factors including high activity by Hutchison Global Communications.
In the Americas, consisting of North and Latin America, Latin American sales were affected by the regulatory situation in Mexico, which limited one of our large customers' willingness to invest. In North America, we are continuing to secure new customers, but the volumes of some current customers did not progress at the rate we expected. But thanks to our strong customer base and competitive product offering, we're still seeing strong growth opportunities in the Americas and we continue to invest for growth in the region. I have great confidence in the measures we have taken and that the initiatives we're executing in this region will pay off.
At the Ethernet and SDN Expo in early November, we announced how we will be tailoring Transmode's Enlighten(TM) management suite to exploit the opportunities inherent in Software Defined Networks (SDN) in the form of simpler and cheaper network operations.
We are pleased by our growth and very good earnings in the first three quarters of the year. As a result of the situation in the Americas and the merger of two of our major European customers, the company's sales in the fourth quarter will show low growth compared to the corresponding quarter of the previous year. However, I'm still confident in our growth strategy, and accordingly, we are continuing to invest in geographical expansion, innovative products and efficient operations. — Karl Thedéen, CEO, Transmode