CommScope (NASDAQ: COMM) reported Q1 EPS of $0.48, $0.04 better than the analyst estimate of $0.44. Revenue for the quarter came in at $1.1 billion versus the consensus estimate of $1.08 billion.

• Sales of $1.10 billion decreased 1.9%
• GAAP operating income of $90.7 million decreased 12.6%
• Non-GAAP adjusted operating income (excluding special items) increased 1.1% to $190.7 million, or 17.3% of sales, an increase of 50 basis points
• Non-GAAP adjusted EBITDA increased 0.1% to $208.4 million, or 19.0% of sales, an increase of 40 basis points
• GAAP net loss of $(0.01) per basic share compared to net income of $0.17 per diluted share
• Non-GAAP adjusted net income (excluding special items) of $0.48 per diluted share decreased 2.0%.
• Issuing second quarter EPS guidance in a range of $0.54 to $0.62 that includes the impact of the acquisition of ARRIS.

“We delivered solid first quarter revenue at the high end of our range and adjusted earnings per share that exceeded our expectations,” said President and Chief Executive Officer Eddie Edwards. “Capitalizing on our excellent customer relationships and market position, we drove strong Mobility Solutions results, as telco providers continued to rely on CommScope to build out their networks’ rapidly increasing capacity and coverage requirements. While Connectivity Solutions results were softer than expected, we see improving trends in the second half of the year, and we are well positioned for future earnings growth.

“We are excited to have closed the ARRIS acquisition early last month and welcome the new team members to CommScope. We believe that together we can transform our combined companies to deliver even greater benefits to customers worldwide. While we still expect to deliver the financial targets from the acquisition that we previously disclosed, the recent, significant declines in capital spending by certain cable providers is having a pronounced impact on ARRIS. We are taking steps to address this situation and moving quickly to combine ARRIS, Ruckus and CommScope in a way that positions us for long-term success. We are confident that, with ARRIS and Ruckus, we can grow faster than the industry and benefit from favorable networking market trends, while enhancing shareholder value.”

GUIDANCE:

CommScope sees Q2 2019 EPS of $0.52-$0.62, versus the consensus of $0.72. CommScope sees Q2 2019 revenue of $2.49-2.65 billion, versus the consensus of $2.85 billion.

• Operating loss of $124 million – $170 million
• Non-GAAP adjusted EBITDA of $365 million – $405 million
• Non-GAAP adjusted effective tax rate of approximately 27% – 29%
• Loss per share of $1.21 – $1.44, based on 196 million weighted average basic shares
• Non-GAAP adjusted earnings per diluted share of $0.54 – $0.62, based on 231 million weighted average diluted shares (assuming the if-converted method is applied for our Series A Convertible Preferred Stock).

Today, CommScope management issued second quarter 2019 guidance. This guidance excludes ARRIS results recorded in the first three days of April 2019 during the pre-close period.

“After a thoughtful and constructive evaluation of the company’s business dynamics, specifically that a significant portion of revenue is derived from short-cycle or project-based engagements, CommScope’s Board of Directors and executive leadership team have decided to transition away from providing annual financial guidance,” Edwards said. “We believe quarterly guidance is more helpful in evaluating our company and appropriately reflective of our forecasting capabilities, and that the timing to make this change is appropriate as we integrate with ARRIS.”

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