CommScope (COMM) Tops Q1 EPS by 2c, Beats on Revenues; Offers Revised FY18 EPS Guidance Below Consensus

CommScope (NASDAQ: COMM) reported Q1 EPS of $0.49, $0.02 better than the analyst estimate of $0.47. Revenue for the quarter came in at $1.2 billion versus the consensus estimate of $1.11 billion.

First Quarter 2018 Performance

• Sales of $1.12 billion, consistent with guidance
• GAAP operating income of $104 million and non-GAAP adjusted operating income (excluding special items) of $189 million
• GAAP net income of $0.17 per diluted share
• Non-GAAP adjusted net income (excluding special items) of $0.49 per diluted share, consistent with guidance

Outlook

CommScope management revised its outlook primarily to reflect the price reductions at certain large North American operators expected in 2018 and 2019, as well as higher input costs. The company is taking action to mitigate these customer price changes through additional cost reduction initiatives, including manufacturing optimization, value engineering projects and additional product in-sourcing. The company provided the following second quarter and full year 2018 guidance.

Second Quarter 2018 Guidance:

• Revenue of $1.21 billion – $1.26 billion
• Operating income of $151 million – $166 million
• Non-GAAP adjusted operating income of $230 million – $250 million
• Non-GAAP adjusted effective tax rate of 29 percent – 30 percent
• Earnings per diluted share of $0.31 – $0.34, based on 196 million weighted average diluted shares
• Non-GAAP adjusted earnings per diluted share of $0.63 – $0.68

Full Year 2018 Guidance:

• Revenue of $4.675 billion – $4.825 billion
• Operating income of $545 million – $590 million
• Non-GAAP adjusted operating income of $870 million – $920 million
• Non-GAAP adjusted effective tax rate of 29 percent – 30 percent
• Earnings per diluted share of $1.20 – $1.32, based on 196 million weighted average diluted shares
• Non-GAAP adjusted earnings per diluted share of $2.33 – $2.48
• Cash flow from operations > $550 million

GUIDANCE:

CommScope sees FY2018 EPS of $2.33-$2.48, versus the consensus of $2.64. CommScope sees FY2018 revenue of $4.675-4.825 billion, versus the consensus of $4.77 billion.

For earnings history and earnings-related data on CommScope (COMM) click here.

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