CommScope Holding Company, Inc. COMM reported impressive fourth-quarter 2024 results, wherein earnings and revenues surpassed the respective Zacks Consensus Estimate. 

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The company’s revenues increased year over year, driven by solid demand across all segments. Management’s strong focus on innovations, strategic expansions and core business also drove the top line.

Net Income

On a GAAP basis, the net loss in the December quarter was $9.9 million or a loss of 5 cents per share compared with a net loss of $597 million or a loss of $2.81 per share in the year-ago quarter. The narrower loss was attributable to top-line expansion and lower operating expenses.

Non-GAAP net income was $48.3 million or 18 cents per share against a net loss of $73.1 million or 34 cents per share in the prior-year quarter. The bottom line beat the Zacks Consensus Estimate by 14 cents.

For 2024, CommScope reported a GAAP net loss of $380.7 million or a loss of $1.78 per share compared with a net loss of $1.57 billion or a loss of $7.44 per share in 2023. Non-GAAP adjusted net loss was $7.2 million or a loss of 3 cents per share compared with a net loss of $78.3 million or a loss of 37 cents per share in the year-earlier quarter.

Revenues

Revenues for the reported quarter were $1.17 billion, up from $923.1 million a year ago, driven by stronger sales in all the segments. Revenues surpassed the Zacks Consensus Estimate by $59 million.

For 2024, net sales totaled $4.21 billion, down from the prior-year level of $4.57 billion.

Revenues in the CCS segment were up 36.3% to $754 million from $553.3 million in the year-ago quarter, backed by the solid demand in the hyperscale and cloud business. 

Sales in the Networking, Intelligent Cellular and Security Solutions (NICS) segment, excluding Distributed Antenna Systems (DAS), increased 13% year over year to $154.2 million, driven by normalized inventory in the channel.
 
Sales in the Access Network Solutions (ANS) segment were $260.9 million compared with $233.4 million in the year-ago quarter. The 11.8% year-over-year growth was backed by stabilizing customer inventory levels and the initial shipments of FDX products.

Region-wise, revenues in the United States increased 30.3% year over year to $776 million. Europe, the Middle East and Africa reported revenues of $167.2 million, up 42.5% from the year-earlier quarter’s tally of $117.3 million. Asia Pacific revenues were $139.8 million, up 14.1% year over year. Caribbean and Latin American revenues fell 18.1% year over year to $50.2 million, while revenues from Canada were up 36% year over year to $35.9 million.

In the third quarter of 2024, CommScope inked a definitive agreement with the American electronics company, Amphenol Corporation, for the divestiture of its OWN segment and the DAS business unit. The company completed the divestiture on Jan. 31, 2025.

Other Details

Gross profit improved to $447.6 million from $342.2 million in the year-ago quarter. Total operating expenses fell to $332.2 million from $462.9 million in the year-ago quarter. Operating income totaled $117.5 million against a loss of $120.7 million in the year-ago quarter. Non-GAAP adjusted EBITDA was $223.1 million compared with $119.4 million a year ago.

Cash Flow & Liquidity

For 2024, CommScope generated $273.1 million in cash from operating activities compared with an operating cash flow of $297.3 million in 2023. As of Dec. 31, 2024, the company had $564.9 million in cash and cash equivalents with $9.24 billion long-term debt compared with respective tallies of $500.3 million and $9.25 billion a year ago.

Outlook

CommScope is well-positioned to take advantage of its FDX and unified products in 2025. For the full year, management expects adjusted EBITDA in the range of $995-$1,045 million. Core operating income is expected in the range of $665-700 million. Core adjusted EBITDA (excluding the OWN segment and the DAS business unit) is forecasted to be between $1 billion and 1.05 billion, with adjusted free cash flow in the band of $25-$30 million. 

COMM’s Zacks Rank

CommScope currently carries a Zacks Rank #3 (Hold).

Key Picks

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In the trailing four quarters, it delivered an earnings surprise of 158.41%. It is a pioneer in advanced mobile technologies that enable wireless communications and capabilities. The company designs and develops a wide range of advanced technology solutions used in digital cellular, wireless 3G, 4G and IEEE 802-related products and networks.

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Arista delivered a trailing four-quarter average earnings surprise of 12.87%. It has a long-term growth expectation of 14.41%

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