CLAREMONT, N.C. - CommScope Holding (NASDAQ:COMM) Company, Inc. (NASDAQ: COMM), a global leader in network connectivity solutions, today reported a narrower-than-expected loss for the first quarter of 2024, while sales declined compared to the same quarter last year. COMM shares were up 6.67% in premarket trading.
The company reported a first-quarter adjusted loss per share of -$0.08, which was $0.11 better than the analyst consensus of -$0.19. Revenue for the quarter was $1.17 billion, exceeding the consensus estimate of $1.12 billion but marking a 29.8% decrease from the $1.664 billion reported in the first quarter of the previous year.
CommScope's first quarter faced headwinds due to continued lower demand across its business segments, which was partially offset by early signs of recovery in the Connectivity and Cable Solutions and Outdoor Wireless Networks businesses. President and CEO Chuck Treadway noted sequential order rate improvements in these areas, expressing confidence in the company's position to capture market recovery.
The company's adjusted EBITDA of $153 million surpassed its guidance range but still represented a significant 51% decline YoY. The reported GAAP loss from continuing operations was -$262.1 million, a stark contrast to the prior year's income of $29.8 million. The adjusted net loss was -$20.3 million compared to a net income of $86.7 million in the first quarter of 2023.
CommScope's CFO, Kyle Lorentzen, highlighted that the first quarter is expected to be the lowest in terms of revenue and adjusted EBITDA for the year. The company ended the quarter with substantial liquidity of over $900 million and continues to explore capital structure alternatives to address upcoming debt maturities.
Regionally, net sales decreased across the United States, Europe, Middle East and Africa, Asia Pacific, Caribbean and Latin America, and Canada. Segment-wise, all four operating segments—Connectivity and Cable Solutions, Outdoor Wireless Networks, Networking, Intelligent Cellular and Security Solutions, and Access Network (LON:NETW) Solutions—experienced declines in net sales.
The company's balance sheet showed a GAAP cash flow used in operations of -$177.7 million and an adjusted free cash flow of -$154.1 million for the first quarter. CommScope ended the quarter with $357.2 million in cash and cash equivalents and total liquidity of approximately $907.7 million.
As the industry faces a recession, CommScope anticipates a recovery in demand in the second half of 2024, supported by cost-saving initiatives implemented in 2023 and the first quarter of 2024. These measures are expected to position the company to capitalize on the anticipated market recovery.
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