- Ceragon Networks Ltd (NASDAQ: CRNT) saw its stock price jump over 8% today following its second-quarter earnings announcement this morning
Ceragon Networks Ltd (NASDAQ: CRNT), a company that provides high-capacity microwave Ethernet and TDM wireless backhaul to wireless service providers and private businesses, saw its stock price jump over 8% today following its second-quarter earnings announcement this morning. Ceragon beat EPS and revenue estimates.
Revenue was down 14.5% year-over-year to $62.4 million compared to $73 million for Q2 2019, but it is up 11.6% compared to the $55.9 million for Q1 2020. And the operating loss was $3.5 million compared to income of $4.1 million last year. The company also reported $4 million in positive cash flow from operating and investing activities. The book-to-bill ratio is above 1 as multiple service providers are accelerating their 4G expansion projects and ISPs are moving swiftly to fill capacity needs.
The effect of COVID-19 has differed from region to region: business in North America, Europe, and APAC remained stable. And India emerged from lockdown in mid-quarter. Plus the company launched a major new project with a new customer was signed in Africa. Latin America bookings were weaker.
“Our results for the second quarter show improvement as compared with Q1, reflecting the return of many of our customers to their ongoing infrastructure projects and the beginning of the ‘new normal.’ Our focus has been to maintain an uninterrupted flow of services and equipment to these customers. At the same time, we have been strengthening our balance sheet and cash position, as evident by the quarter’s reduction in inventories and healthy $4 million in positive cash flow, while also focusing on improving our results, increasing our revenues, margins and net results as compared with the first quarter,” said Ira Palti, President and CEO of Ceragon.
The cash and cash equivalents were $35.2 million compared to $44.1 million in the previous quarter. The company’s management is expecting trends created by the pandemic to accelerate 5G network rollouts, which serves as a future growth driver.
“The new COVID-19 reality has brought a new urgency to 5G rollout and 4G network expansion plans, a trend that we expect to persist long after COVID-19 has passed. While no one knows exactly what the next few months will look like, we believe the situation plays to our strengths and will have a positive long-term effect. Meanwhile, we are financially stable, we expect our business to continue returning towards normal, and we are positioned to benefit from future opportunities,” added Palti.