Re: Commscope Verifies HFC Upgrades Still Strong
Thread- When I first heard the headline this AM that Commscope(sym:CTV) was warning, it concerned me because they are a large supplier to the cableco upgrade marketplace. But in reading the details, apparently there is no problem in the HFC market. On the contrary it appears to be very strong for Commscope. -MikeM(From Florida)
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CommScope Comments on Third Quarter Outlook
Company Also Announces Extended Supply Arrangement for Bimetal Center Conductors
HICKORY, N.C., Aug. 14- CommScope, Inc. today announced that it expects to report third quarter 2000 results below consensus analyst estimates. The Company also announced today that it has secured a supply arrangement for bimetal center conductors, which are one of the primary materials in the production of coaxial cables, enhancing CommScope's ability to meet strong demand for Cable Television and Other Video products.
...The expected shortfall in earnings is due primarily to difficult pricing patterns and lower-than-expected sales in Local Area Network (LAN) and Wireless/Other Telecom products. LAN and Wireless/Other Telecom account for approximately 11% and 14% of the Company's businesses respectively. The Company noted that it continues to experience strong demand for Cable Television and Other Video Products, which account for approximately 75% of CommScope sales.
CommScope continues to believe it can achieve year-over-year revenue growth of 20%-25% in the second half of 2000.
``While we are disappointed with the current sales trend in LAN and Wireless/Other Telecom, we remain optimistic about the long-term opportunities for these products[coaxial cable],'' said Frank M. Drendel, CommScope Chairman and Chief Executive Officer. ``We are committed to growth in all of the markets we serve and intend to sharpen execution across the Company to achieve this goal. We intend to respond aggressively to the competitive pricing environment in wireless and continue to focus on driving down product cost while broadening our portfolio of wireless products. We have already taken steps to meet market pricing in LAN and will work to increase our participation in the Category 5 and 5e segments of that market.''
As a result of recent negotiations with our current supplier, CommScope has secured a supply arrangement for a fixed amount of bimetal center conductors for calendar year 2001 and the parties are working toward a longer-term arrangement.
Commenting on this favorable development, Drendel said: ``Production capacity and supplies of key materials continue to be tight due to the surging demand for Hybrid Fiber Coaxial (HFC) products. This bimetal supply arrangement, combined with our improving internal bimetal production, addresses concerns regarding a key material and enhances our ability to support the growing demand for broadband cable. By mid-year 2001, we intend to have a combined total of more than $1 billion of cable manufacturing capacity for HFC and wireless products.'' |
