Ceragon report weak Q1 results, cites COVID-19 disruption

Ceragon Networks reported Q1 revenue of $55.9 million compared with $69.2 million for Q1 2019 and $71.3 million for Q4 2019. Gross margin for the quarter was 25.1% compared to 35.6% a year earlier and 31.7% in the preceding quarter. Net income was $(6.9) million, $(0.09) per diluted share compared with $0.8 million, $0.01 per diluted share for Q1 2019 and $(4.1) million, or $(0.05) per diluted share for Q4 2019.

Commenting on the results, Ira Palti, President and CEO of Ceragon, said, "Our results were in line with the business update we provided on April 6th, reflecting the normal seasonality of the first quarter compounded by the disruption created by the COVID-19 environment. At the same time, the sweeping changes that the pandemic has made in the way we all work, shop, learn and stay entertained have created a global surge in demand for broadband capacity that has increased demand for our products. Although no one knows how to predict the timing of the recovery, the fact that broadband connectivity is now recognized as an essential utility brings urgency to the need to increase the capacity of existing networks and to extend network coverage to more of the population. During the first quarter, this trend accelerated bookings for our wireless hauling solutions, and we believe it will accelerate the transition to 5G, further emphasizing the need for our differentiated technologies."

Mr. Palti continued, "In the meantime, we are fully focused on serving our customers in today's dynamic environment. We are proud of our success in meeting our commitments in the face of supply chain disruptions, and working to overcome challenges as they arise. We are pleased that India's Airtel has recently placed a large order, indicating the return of India as a major focus market after last year's slowdown. In Europe, we had the strongest first-quarter bookings in six years, and in Latin America we continued executing on expansion projects across the continent."