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Sep 30, 2020
CommScope Q3 2020 Earnings Report
CommScope's bottom line performance exceeded expectations, with Broadband Networks segment demonstrating substantial growth and strong cash flow generation.
Key Takeaways
CommScope reported Q3 2020 results with net sales of $2.168 billion, a GAAP net loss of $116.3 million, and non-GAAP adjusted EBITDA of $341.9 million. The Broadband Networks segment grew approximately 20% sequentially and year over year. The company generated better than expected cash flow, with year-to-date cash flow from operations over $338 million and non-GAAP adjusted free cash flow over $350 million.
Net sales reached $2.168 billion, showing a 3% increase from Q2.
GAAP net loss was reported at $116.3 million.
Non-GAAP adjusted EBITDA totaled $341.9 million, a 22% improvement from Q2.
Cash flow from operations amounted to $172.2 million, and non-GAAP adjusted free cash flow was $176.0 million.
Forward Guidance
CommScope anticipates macroeconomic uncertainty will persist in the near-term, but they are focused on improving financial performance and flexibility. They plan to manage expenses and reduce costs while making strategic investments to unlock growth opportunities.
Positive Outlook
- Aggressively manage expenses and reduce costs.
- Strategic investments in fiber cabling and connectivity capacity.
- Position the company to unlock growth opportunities.
- Focus on growing the business.
- Creating long-term, profitable growth through a combination of investment opportunities and cost-cutting measures.
Challenges Ahead
- Current macroeconomic uncertainty is expected to persist in the near-term.
- Net sales declined primarily due to year over year decreases in the Home Networks and Outdoor Wireless Networks segments.
- COVID-19 incremental costs negatively impacted non-GAAP adjusted EBITDA by approximately $10 million.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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