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Cambium's (CMBM) Q1 Loss Wider Than Expected, Revenues Fall
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Cambium Networks Corporation (CMBM - Free Report) reported soft first-quarter 2024 results, with the top and bottom lines missing the respective Zacks Consensus Estimate. The leading wireless solutions provider recorded a year-over-year revenue contraction due to a decline in net sales across all businesses, high inventory levels and macroeconomic headwinds. High incentives and discounts to distributors also hurt revenues.
Net Income
On a GAAP basis, the company reported a net loss of $26.4 million or a loss of 95 cents per share against a net income of $4.3 million or 15 cents per share a year ago. The downturn was primarily attributable to a significant revenue decline.
Non-GAAP net loss was $12.7 million or a loss of 46 cents per share against a net income of $6.8 million or 24 cents per share in the year-ago quarter. The bottom line was wider than the Zacks Consensus Estimate of a loss of 23 cents.
Cambium Networks Corporation Price, Consensus and EPS Surprise
Quarterly net sales declined significantly to $42.3 million from $77.4 million in the year-ago quarter. Revenues were affected by a low order volume in the Enterprise business as distributors largely focused on lowering their channel inventories. Aggressive discounts and soft economic growth also led to the revenue shortfall. The net sales decline in the Point-to-Multi-Point (PMP) business further hurt the top line. The top line missed the consensus estimate of $46 million.
By product category, revenues from PMP were $19.4 million compared with $22.3 million a year ago. Inventory adjustments and the timing of the FCC’s approval of 6 GHz spectrum affected demand from service providers. The top line fell short of our revenue estimate of $23 million.
Point-to-Point (PTP) business revenues were down to $14.4 million from $18 million in the year-ago quarter. Delays in the U.S. federal budgetary allocations for defense sales affected the PTP segment sales. Net sales missed our revenue estimate of $16.8 million. Revenues from the Enterprises business witnessed a sharp decline to $7.2 million from $35.7 million in the year-ago quarter.
Region-wise, revenues from North America decreased to $25 million from $47.6 million in the year-ago quarter. Net sales in the EMEA region declined to $8.4 million from $19.7 million. Revenues from the Asia Pacific fell to $4 million from $6.4 million in the year-earlier quarter. Revenues from the Caribbean and Latin America region, however, improved from $3.7 million to $4.9 million.
Other Details
Non-GAAP gross profit was $9.6 million for a corresponding margin of 22.7% compared with respective figures of $40.3 million and 52.1% in the year-ago quarter. Lower volumes of high-margin Enterprise products, low freight capitalization and elevated inventory levels adversely impacted the gross margin. Non-GAAP operating loss was $16.7 million against an operating income of $9.4 million in the prior-year quarter.
Cash Flow & Liquidity
In the March quarter, Cambium utilized $15.6 million compared with $5.9 million in the prior-year quarter. As of Mar 31, 2024, the company had $38.7 million in cash with $61.3 million in long-term debt.
Outlook
For the second quarter of 2024, revenues are estimated to be in the range of $43-$48 million. Non-GAAP gross margin is projected to be 40-42%. Non-GAAP operating expenses are expected to be $24.6-$25.6 million. The company anticipates a non-GAAP net loss of $5.4-$6.9 million or a loss of 19-24 cents per share.
For 2024, revenues are estimated to be in the range of $205-$225 million. Non-GAAP gross margin is projected to be about 40%. The company anticipates a non-GAAP net loss of $11.6-$18 million or a loss of 41-64 cents per share.
Cambium is taking active initiatives to optimize cost structure. Its strategy to identify and invest in key growth areas will likely bring long-term benefits. Management expects the normalization of channel inventory for the Enterprise business to take a considerable amount of time. FCC’s approval of Cambium’s affordable 6 GHz solutions will likely boost the PMP business’s prospects. The company anticipates revenues in the PTP business to improve as defense allocation picks up.
Sohu.com Limited (SOHU - Free Report) is scheduled to release first-quarter 2024 earnings on May 20. The Zacks Consensus Estimate for SOHU is pegged at a loss of 22 cents per share.
Keysight Technologies, Inc. (KEYS - Free Report) is set to release second-quarter fiscal 2024 earnings on May 20. The Zacks Consensus Estimate for earnings is pegged at $1.38 per share, implying a decline of 34.9% from the year-ago reported figure.
Keysight has a long-term earnings growth expectation of 4.1%. KEYS delivered an average earnings surprise of 6.4% in the last four reported quarters.
Workday, Inc. (WDAY - Free Report) is slated to release first-quarter fiscal 2025 earnings on May 23. The Zacks Consensus Estimate for earnings is pegged at $1.57 per share, indicating growth of 19.8% from the year-ago reported figure.
Workday has a long-term earnings growth expectation of 22.7%. WDAY delivered an average earnings surprise of 12.7% in the last four reported quarters.
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Cambium's (CMBM) Q1 Loss Wider Than Expected, Revenues Fall
Cambium Networks Corporation (CMBM - Free Report) reported soft first-quarter 2024 results, with the top and bottom lines missing the respective Zacks Consensus Estimate. The leading wireless solutions provider recorded a year-over-year revenue contraction due to a decline in net sales across all businesses, high inventory levels and macroeconomic headwinds. High incentives and discounts to distributors also hurt revenues.
Net Income
On a GAAP basis, the company reported a net loss of $26.4 million or a loss of 95 cents per share against a net income of $4.3 million or 15 cents per share a year ago. The downturn was primarily attributable to a significant revenue decline.
Non-GAAP net loss was $12.7 million or a loss of 46 cents per share against a net income of $6.8 million or 24 cents per share in the year-ago quarter. The bottom line was wider than the Zacks Consensus Estimate of a loss of 23 cents.
Cambium Networks Corporation Price, Consensus and EPS Surprise
Cambium Networks Corporation price-consensus-eps-surprise-chart | Cambium Networks Corporation Quote
Revenues
Quarterly net sales declined significantly to $42.3 million from $77.4 million in the year-ago quarter. Revenues were affected by a low order volume in the Enterprise business as distributors largely focused on lowering their channel inventories. Aggressive discounts and soft economic growth also led to the revenue shortfall. The net sales decline in the Point-to-Multi-Point (PMP) business further hurt the top line. The top line missed the consensus estimate of $46 million.
By product category, revenues from PMP were $19.4 million compared with $22.3 million a year ago. Inventory adjustments and the timing of the FCC’s approval of 6 GHz spectrum affected demand from service providers. The top line fell short of our revenue estimate of $23 million.
Point-to-Point (PTP) business revenues were down to $14.4 million from $18 million in the year-ago quarter. Delays in the U.S. federal budgetary allocations for defense sales affected the PTP segment sales. Net sales missed our revenue estimate of $16.8 million. Revenues from the Enterprises business witnessed a sharp decline to $7.2 million from $35.7 million in the year-ago quarter.
Region-wise, revenues from North America decreased to $25 million from $47.6 million in the year-ago quarter. Net sales in the EMEA region declined to $8.4 million from $19.7 million. Revenues from the Asia Pacific fell to $4 million from $6.4 million in the year-earlier quarter. Revenues from the Caribbean and Latin America region, however, improved from $3.7 million to $4.9 million.
Other Details
Non-GAAP gross profit was $9.6 million for a corresponding margin of 22.7% compared with respective figures of $40.3 million and 52.1% in the year-ago quarter. Lower volumes of high-margin Enterprise products, low freight capitalization and elevated inventory levels adversely impacted the gross margin. Non-GAAP operating loss was $16.7 million against an operating income of $9.4 million in the prior-year quarter.
Cash Flow & Liquidity
In the March quarter, Cambium utilized $15.6 million compared with $5.9 million in the prior-year quarter. As of Mar 31, 2024, the company had $38.7 million in cash with $61.3 million in long-term debt.
Outlook
For the second quarter of 2024, revenues are estimated to be in the range of $43-$48 million. Non-GAAP gross margin is projected to be 40-42%. Non-GAAP operating expenses are expected to be $24.6-$25.6 million. The company anticipates a non-GAAP net loss of $5.4-$6.9 million or a loss of 19-24 cents per share.
For 2024, revenues are estimated to be in the range of $205-$225 million. Non-GAAP gross margin is projected to be about 40%. The company anticipates a non-GAAP net loss of $11.6-$18 million or a loss of 41-64 cents per share.
Cambium is taking active initiatives to optimize cost structure. Its strategy to identify and invest in key growth areas will likely bring long-term benefits. Management expects the normalization of channel inventory for the Enterprise business to take a considerable amount of time. FCC’s approval of Cambium’s affordable 6 GHz solutions will likely boost the PMP business’s prospects. The company anticipates revenues in the PTP business to improve as defense allocation picks up.
Zacks Rank
Cambium currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Upcoming Releases
Sohu.com Limited (SOHU - Free Report) is scheduled to release first-quarter 2024 earnings on May 20. The Zacks Consensus Estimate for SOHU is pegged at a loss of 22 cents per share.
Keysight Technologies, Inc. (KEYS - Free Report) is set to release second-quarter fiscal 2024 earnings on May 20. The Zacks Consensus Estimate for earnings is pegged at $1.38 per share, implying a decline of 34.9% from the year-ago reported figure.
Keysight has a long-term earnings growth expectation of 4.1%. KEYS delivered an average earnings surprise of 6.4% in the last four reported quarters.
Workday, Inc. (WDAY - Free Report) is slated to release first-quarter fiscal 2025 earnings on May 23. The Zacks Consensus Estimate for earnings is pegged at $1.57 per share, indicating growth of 19.8% from the year-ago reported figure.
Workday has a long-term earnings growth expectation of 22.7%. WDAY delivered an average earnings surprise of 12.7% in the last four reported quarters.