Global network connectivity solutions leader CommScope Holding Company has released preliminary financial results for the quarter (Q3) ending September 30, 2023, indicating a significant downturn in its stock value following the announcement.
At the time of this publication, CommScope Holding Company Inc stock (COMM) has witnessed a decline.
CommScope Holding Company Inc
Current Price: $1.45
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Anticipated figures for Q3 2023 reveal net sales of approximately $1.60 billion, with core net sales at approximately $1.35 billion. The company continues to grapple with challenges, particularly in the CCS and OWN segments, stemming from low order rates due to customers maintaining higher-than-needed inventories, an uncertain macroeconomic climate, and reduced spending on service provider network capital expenditures. The net loss attributable to common stockholders is projected to be around $829 million, inclusive of non-cash asset impairments related to the Home and ANS segments, totaling approximately $895 million. Non-GAAP adjusted EBITDA is expected to stand at roughly $249 million, while Core non-GAAP adjusted EBITDA is estimated at about $246 million.
In light of the lower-than-expected Q3 results and ongoing difficulties, CommScope has revised its adjusted EBITDA projections downward. The company now anticipates full-year 2023 Core adjusted EBITDA to fall within the range of $1.00 to $1.05 billion. A comprehensive reconciliation of GAAP results with non-GAAP adjusted figures accompanies this release.
Chuck Treadway, President and CEO of CommScope, stated, “The weaker macroeconomic backdrop and customer inventory digestion continues to negatively impact revenues, resulting in the Company lowering our prior adjusted EBITDA guideposts. As we moved through the quarter, in addition to already discussed challenges in CCS and OWN, we also saw demand weaken in our ANS business where customers are managing higher than required inventory levels and experiencing project delays in some of their upgrade plans. We believe this softer demand environment will continue as we move into the first half of 2024, impacting both revenue and profitability. However, we are encouraged that our work towards efficiencies and cost actions positions us well when the demand for our products returns. Furthermore, we feel we are well-positioned to benefit from major government programs and technology cycles that will enable us to reach our long-term goals, including wireless, government broadband investments and enterprise solutions.”
It’s crucial to note that the provided Q3 2023 results of CommScope Holding are still preliminary and subject to the company’s quarter-end close procedures. The consolidated financial statements for the three months ended September 30, 2023, are not yet available. Thus, the data presented here represents initial estimates subject to potential adjustments following the completion of the quarterly review of the company’s consolidated financial statements. These initial estimates may differ from the actual results disclosed publicly for Q3 2023.
Additionally, the preliminary full-year 2023 financial outlook is based on management’s information as of the report date, and therefore, these expectations are subject to change.
As previously announced, CommScope will conduct a conference call on November 9th at 8:30 a.m. ET, during which management will delve into the details of the Q3 2023 results. The conference call will be accessible via webcast.
