Commscope also highlighted the firm is well-positioned to capture business opportunities in the 5G field
Commscope expects to see future benefits from partnerships with large North American customers despite some impacts in the firm’s margins, the firm’s CFO Alexander Pease said on a conference call with investors.
“We continued to engage with our large North American customers to deliver innovative smarter solutions that help them drive down their total cost of ownership and increased efficiency. While these partnerships included certain price concessions that negatively impacted margins, they also facilitated greater collaboration, which is now providing the opportunity for incremental volume and new product acceleration,” Pease said.
Pease highlighted that the company’s business in the second quarter grew mid-single digits, chiefly boosted by the North American market.
“We experienced strong double-digit growth rates in our fiber cable products, yet it remains a small portion of our business,” the executive said.
“In our Indoor Network Solutions business, we continue to manage technology transitions. We have shifted our focus toward helping our customers migrate from on-premise to multi-tenant data centers and towards the rapid growth in cloud and hyperscale data centers and are pleased with our progress to date, albeit from a relatively small base,” Pease said. “We expect further acceleration in the second half of the year. As anticipated, the indoor copper decline was offset by mid-single-digit indoor fiber growth,” he added.
In the Mobility Solutions segment, Pease said, the positive performance was driven by the firm’s position in the FirstNet build and in deployments by operators to densify their 4G networks in preparation for 5G.
“We believe the second quarter will be Mobility segment’s strongest quarter of the year. We remain excited about the opportunities ahead, including continued FirstNet deployments, pre-5G densification projects, and new spectrum deployments,” he said.
“I want to highlight the solid progress we’re making with our ongoing growth assessment. The purpose of this assessment is to accelerate growth in our core markets. We’re working to identify new opportunities or adjacencies where we can expand our addressable markets. Key focus areas include 5G public and private network solutions, ubiquitous data center markets, industrial connectivity, as well as other opportunities,” Pease said.
The executive also said that Commscope remains committed to identifying and pursuing opportunities to drive solid growth in core and adjacent markets through innovation and acquisitions.
Commenting on the business outlook from future 5G deployments, Pease said that Commscope is well-positioned to capture growth opportunities in this space.
“5G will be built out on the backbone of the LTE network, and so all of the operators that we interact with are in the process of densifying and virtualizing their networks, and so we are seeing strong spending really across the board. And it’s uniquely positioned for our technology with multi-port antennas,” Pease said. “We’re actively partnering with Nokia to develop an active antenna that will serve the 5G market. And so, we feel as though we’re extremely well-positioned to take advantage of whatever might come out of that partnership,” he added.
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