Strong Guidance Spurs CommScope Shares11/21/2004 7:00 PM Eastern
CommScope surged more than 7% ($1.35), to $19.64, on Nov. 17, after the maker of “last-mile” telecom gear said 2005 results would be in line with analyst expectations.
CommScope said it expects 2005 revenue to be between $1.2 billion and $1.3 billion (up 15% from the $1.1 billion eyed for 2004) and operating margins to be 6% or more for the year.
Most analysts expected 2005 revenue to be about $1.26 billion.
CommScope said the revenue growth is mainly due to modest volume growth and anticipated price increases. Revenue for the first nine months of 2004 was $857.1 million. Fourth-quarter sales are expected to range from $270 million to $285 million.
In a statement, CommScope chairman and CEO Frank Drendel said the February acquisition of Avaya Inc.’s connectivity-solutions business (which makes cables used in enterprise systems for local area networks) created new growth opportunities. “During 2005, we intend to build upon this acquisition, capture additional synergy and enhance operating performance.” Capital spending is expected to be about $30 million or less in 2005, in line with 2004.