Ceragon Sees Revenue, Deliveries Hit Due to Coronavirus-Induced Lockdowns
Ceragon Networks Ltd. (CRNT) warned that first-quarter revenues would be impacted by delays in the pace of network rollouts and shipments, as many countries around the world have entered into lockdowns to contain the fast spread of the coronavirus pandemic.
Furthermore, the wireless backhaul company said it also expects deliveries in the second quarter to be negatively impacted due to the movement restrictions implemented by global governments. In the first quarter, Ceragon sees revenue to be in the range of $55.5 million to $57 million, which is below the consensus of $64 million.
“Our customers are doing everything they can these days in order to increase network capacity and support the sudden surge in network traffic emerging from the COVID-19 pandemic,” said Ceragon’s President and CEO Ira Palti. “Our main objective is to help our customers scale up faster than ever.”
At the same time, Ceragon reported that demand during the first quarter was “much stronger than anticipated”, especially towards the end of the quarter, with a high book-to-bill ratio of well above 1. The company believes that “strong demand” for its products and services will continue during 2020.
“The need for increased network capacity from cell sites to the network core will remain long after the current crisis is resolved and will fuel the transition to 5G, with Ceragon’s flexible wireless hauling solutions playing a leading role in this transition in 2020,” Palti said.
The two Wall Street analysts covering Ceragon in the last three months have a Hold rating on the company. George Iwanyc at Oppenheimer has a $3.50 price target on the stock, which represents 126% upside potential in the next 12 months. (See Ceragon’s stock analysis on TipRanks)
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