CommScope (COMM) Tops Q2 EPS by 13c, Revenues Beat

CommScope (NASDAQ: COMM) reported Q2 EPS of $0.32, $0.13 better than the analyst estimate of $0.19. Revenue for the quarter came in at $2.1 billion versus the consensus estimate of $2.06 billion.

Highlights

• Net sales of $2.103 billion; 3% improvement from Q1
• GAAP net loss of $321.1 million
• Non-GAAP adjusted EBITDA of $279.8 million; 21% improvement from Q1
• Cash flow from operations of $209.1 million and adjusted free cash flow of $217.4 million
• Company further de-risks balance sheet and extends debt maturities
• Sales and non-GAAP adjusted EBITDA expected to improve in the second half of 2020

“The network connectivity we provide to our customers and business partners has never been more essential. Our business model has once again demonstrated its strength and resiliency as we delivered results in the second quarter above our expectations in an incredibly challenging operating environment. Our talented employees quickly adapted to new ways of working, managed the global supply chain dynamically to mitigate the impacts of pandemic related disruptions and remain committed to building a stronger foundation for the future,” said President and Chief Executive Officer Eddie Edwards.

Edwards continued, “We are focused on delivering innovative solutions that keep people connected around the world. Our team is actively evolving our business to better position us for growth and success. We are focused on right-sizing our operations, reprioritizing investments, and focusing on the key technologies that empower our connected society. The Board and leadership team are proud of our accomplishments to date and are confident we will build momentum and continue to enhance shareholder value in the near- and long-term.”

Alex Pease, Executive Vice President and Chief Financial Officer, said, “While market conditions remain dynamic, we are focused on controlling what we can control, strengthening our liquidity position and improving our cost structure. We continue to take decisive actions to enhance our financial flexibility, including the recent refinancing of $700 million of senior unsecured notes. In the first half of the year we prudently managed cash on the balance sheet in light of the significant uncertainty related to the global pandemic and its impact on the global banking system. As we look ahead to the second half of the year, we believe some of that risk has abated, our business has strengthened, and our liquidity remains very strong. As a result, we plan to resume debt repayment in the third quarter, and we will evaluate additional opportunities before year-end depending on business performance and the macro economic environment.”

Outlook

Due to the significant and evolving uncertainties related to the impact of the COVID-19 pandemic, CommScope is providing limited financial guidance for 2020.

While the Company is not providing specific guidance for the third quarter, the Company expects its third quarter sales and non-GAAP adjusted EBITDA to improve modestly compared to the second quarter. Additionally, the Company expects sales and non-GAAP adjusted EBITDA to sequentially improve in the fourth quarter.

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

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