Despite a backhaul market that is supposed to be booming, wireless backhaul provider Ceragon Networks released preliminary quarterly results that did not meet the low end of its guidance, citing hesitation among operators to commit investment to backhaul, among other reasons.
“It is taking longer than we expected to close certain deals,” said Ira Palti, Ceragon’s president and CEO. “We experienced a level of bookings in Q1 lower than we would have expected based on seasonal weakness, reflecting operators’ cautious approach, despite the need for additional capacity.”
Ceragon provides microwave backhaul for 2G, 3G and LTE networks, with its products deployed by more than 430 service providers globally.
Ceragon’s preliminary results include revenues estimated at $89 million to $91 million, well below its guidance of $95 million to $105 million for the quarter ending March 31. Generally accepted accounted practice earning per share were projected at a loss of between 36 cents and 39 cents, or a loss of 15 cents to 18 cents on a non-GAAP basis.
“We expect the re-evaluation of some aspects of customers’ business models, as well as continued intense budget scrutiny, to cause longer sales cycles to persist, even though Q2 bookings are likely to show some improvement for seasonal reasons,” Palti added.
A recent report from Infonetics said that the backhaul market surpassed $8 billion last year, with microwave solutions accounting for the largest portion of revenue and expected to make up 56% of market revenue by 2017.
Ceragon recently closed on financing that included $73.5 million in secured credit loans, with an additional line of credit of up to $40.2 million to “manage fluctuating working capital needs, mainly related to the deployment of its equipment at tier-one operators and for general corporate purposes.”
The company’s final figures for the first quarter of 2013 will be released on May 6.
