Wednesday, October 15, 2008

Ceragon Confirms Q3 Guidance for 30% YoY Growth

Ceragon Networks, a supplier of Ethernet and TDM wireless backhaul solutions, confirmed its Q3 2008 financial guidance.

Ceragon expects revenues for the third quarter of 2008 to be approximately $58 million, an increase of about 30% from Q3 of 2007 and in-line with the company's previous guidance.

Gross margin is expected to dip to approximately 31% to 32% in Q3, primarily as a result of a spike in OEM-related revenues to about 43% of total revenues, compared with 31% of total revenues in Q2, as well as a less favorable geographic mix. Gross margin was 36% and 34% in Q3 of 2007 and Q2 of 2008, respectively.

As a result of the lower than expected gross margin in Q3, GAAP net income is expected to be approximately $3.2 to $3.6 million, or $0.08 to $0.09 per diluted share, compared with $3.7 million, or $0.11 per diluted share in Q3 of 2007.

"The Asia Pacific region continued to lead our growth during Q3," said Ira Palti, President and CEO of Ceragon. "As we expected, the EMEA region returned to more typical revenue levels in Q3 after a temporary dip in Q2, and we were pleased to see modest sequential growth in North America.... Our book-to-bill ratio of one in Q3 indicates healthy demand continues and we are targeting 35% growth in 2008 over 2007, but tempering our expectations for exceeding that target due to the level of global economic uncertainty. Meanwhile, the feedback from the field remains uniformly encouraging."

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