CommScope (COMM) Q2 Earnings Soar 86% with $10.5B Divestiture

CommScope shares closed at $14.51, up $6.72 or 86.26% on August 5 following a blowout Q2 earnings report and a major business divestiture announcement.

Earnings Highlights

• Revenue: $1.39 billion, up 31.7% YoY, well above expectations.
• GAAP EPS: $0.05 vs. $(0.34) a year ago.
• Adjusted EPS: $0.44 vs. $0.03 prior year; beat Street estimates by ~$0.20.
• Adjusted EBITDA: $337.8 million, up 79% YoY; margin expanded to 24.3% from 17.9%.
• Free Cash Flow: $64.5 million.
• Cash on Hand: $571.1 million; total liquidity ~$990.8 million.

Segment Performance

• Access Network Solutions (ANS): Revenue rose 65% to $322.5 million.
• Ruckus Networking: Up 46.5% to $190.2 million.
• Connectivity & Cable Solutions (CCS): Grew 20.2% to $875.4 million.

Major Strategic Move

CommScope announced the sale of its CCS segment to Amphenol for $10.5 billion in cash. The deal, expected to close in the first half of 2026, will allow CommScope to:

• Repay outstanding debt.
• Redeem preferred shares.
• Issue a special dividend to common shareholders within 60–90 days of closing.

This sale represents a major shift in CommScope’s strategy, focusing on higher-growth businesses while significantly strengthening its balance sheet.

Updated Guidance

• FY25 adjusted EBITDA now expected between $1.15 billion and $1.20 billion, up from prior guidance.
• Management emphasized stronger visibility, operational execution, and a more focused portfolio going forward.

Investor Takeaway

CommScope delivered a high-quality earnings beat and paired it with a strategic move that reshapes its capital structure. Profitability improved sharply, margins expanded, and revenue growth was broad-based across all segments. The CCS divestiture adds a clear catalyst, positioning the company for deleveraging and potential capital returns.

This was not just an earnings beat—it was a fundamental reset of the company’s outlook and balance sheet.