Israeli wireless backhaul specialist Ceragon Networks Ltd. (Nasdaq: CRNT; TASE:CRNT) today announced that a tier 1 mobile operator in India has placed over $60 million in follow-on orders for Ceragon's IP-20 Platform. The Indian telco is looking to significantly expand 4G LTE service coverage and increase network capacity in 2017.
Consequently, Ceragon's preliminary expectation for revenue in the first half of 2017 has been increased by $20 to $25 million, with most of the impact expected in the second quarter of 2017. During its most recent results conference call in November 2016, management indicated that revenues were expected to stabilize in a quarterly range of around $75 to $80 million over the next several quarters, with the possible exception of a seasonal dip (referring to typical seasonality in the first quarter).
The preliminary outlook for the second half of 2017 remains unchanged, and the company continues to expect revenue to average $75 to $80 million per quarter in the third and fourth quarters. Due to the expected shift in geographic mix, gross margin is expected to be below the company's previous target of 34% during the first half of 2017 but, consistent with its focus on profitability, the company now expects gross profit in the first half of the year to be higher than its previous assumptions. Therefore, these orders serve to increase management's confidence that it can reach or exceed its previously stated goal of a 40% increase in non-GAAP net profit for 2017 compared to 2016.
The IP-20 Platform enables the operator to connect 4G LTE sites across the network, delivering HD multimedia services across India to subscribers. The new wave of IP-20 Platform wireless backhaul deployments aims to support the mobile operator's goal to vastly increase 4G service coverage and increase network capacity.
Ceragon president and CEO Ira Palti said, "We invite our customers to challenge us to take them further, and this is a wonderful example of just that. This long-standing customer's strategic decision to aggressively deploy our IP-20 Platform is a true testament to our ability to help them to achieve the highest value. We are committed to resolving our customer's wireless backhaul challenges by delivering innovative, best of breed solutions that meet their current and future needs."
Published by Globes [online], Israel business news - www.globes-online.com - on January 18, 2017
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