Ceragon Networks Reports Fourth-Quarter, Full-Year Results
Monday, February 10, 2020 | Comments

Ceragon Networks reported results for the fourth quarter and full year ended Dec. 31.

Fourth-quarter revenues were $71.3 million, down 16.9% from the fourth quarter of 2018 and down 1.3% from the third quarter of 2019. Gross margin was 31.7%, compared to 34.4% in the fourth quarter of 2018 and 32.2% in the third quarter of 2019. Operating loss was $2.2 million compared with operating income of $6.5 million in the fourth quarter of 2018 and operating income of $2.1 million in the third quarter of 2019.

Net income loss was $4.1 million for the fourth quarter of 2019 compared with net income of $11.6 million in the fourth quarter of 2018. Net income for the third quarter of 2019 was $200,000. Cash and cash equivalents were $23.9 million at end-2019 compared with $20.5 million at Sept. 30.

Full-year 2019 revenues were $285.6 million, down 17% from 2018. Gross margin was 33.9% compared with 33.8% in 2018. Full-year operating income was $7.3 million, compared to an operating income of $26.1 million in 2018. Full-year net loss was $2.3 million. Net income for 2018 was $23.0 million.

"Revenue in 2019 declined primarily due to region-specific issues affecting operators in India, causing a significant slowdown after several very strong years," said Ira Palti, president and CEO of Ceragon. "Excluding India, revenue from the rest of the world increased by approximately 11% compared to 2018, and we believe we are gaining market share. The most significant accomplishment of 2019 was obtaining several important new 5G design wins, including one through a new relationship with a very large Tier 1 U.S. operator. Given the long planning and project cycles, these new design wins are likely to begin contributing meaningfully to revenue only in late 2020 and beyond.

"Our outlook for the coming months is clouded by the effects of the outbreak of the novel coronavirus in Asia and particularly in China,” he said. “Our supply chain could be significantly impacted, and our customers could be negatively affected. However, as the impact is too early to determine, we have not addressed it in our forward-looking statements.”

The geographical breakdown of revenue for the year was 25% from Latin America and 19% from Asia Pacific. India accounted for 17% of revenues, followed by North America and Europe at 15% each. Africa contributed to 9% of revenues for the year.

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