Valid questions, but let's speculate a bit.
Revenues of 15.9 for q
2 clients over 10% each, ie. about 2 million each. Their GM is lower than average, meaning that the 'normal GM' is higher than 40.2%.
Sharaga said something that impressed me, and demonstated his business acumen. He said that they open new servicing offices only if there is a critical mass of biz from a specific geography. He continued that profitability for the new offices is rapid, ie. 1 or 2 quarters. This is a clear demonstation of good management. Organic Growth is the healthiest, and lowest risk. And Ceragon has found the right business model.
IMO, Press releases of more customers and deals will quickly help levitate Ceragon to $7 plus. You'll see.
From who? STXN (loser)?
They could be in deals where they resell products from Alvarion or Airspan or Redline - (NLOS or non-license equipment) as part of a larger system project.
I would guess they probably have lower margins from those vendors.
This would also speak for consolidation of this space - as no vendor can offer a total solution.
But footsteps from one of the "DEADBEATS" i.e. Stratex??? - I doubt it.
Dumb. Of course a bad conference call is to blame. HA HA. Of course it was because of 3rd party products CRNT margins went down, it couldn't possibly be the manufacturing inefficiencies and pricing pressures from competition. All the good things that happened are in the past quarter, not future quarters. The past is just that, the past. So I say again, CRNT had a good qtr, so what's next? I say lost business at lower margins. Are those footsteps you hear?
The problem also is that these guys did a bad job on the con call. They said there were deals with 3rd party products involved (meaning lower margins) - but didn't elaborate well.
They could have controlled that GM thread much better than they did. They should have been promoting all the good things that went on in the quarter instead.
Just a very weak con call - after a very good quarter. Too bad...
Let me add to the gross margin discussion. It is difficult understand the decline in gross margin without additional information:
1. Volume of large customers this quarter vs other quarters
2. Amount of pass thru equipment bought from other manufacturers this quarter vs other quarters
Amazon got pounded 16%. and NAZ markets were very weak today.
Mngmt sounds conservative.
1. Not booking sales until they are delivered 100%. IMO Calculate that there is about $3 million of sales from Q4 not recognized yet.
2. Book to Bill > 1
3. Two large customers, over 10% of sales, and they had a right to get a volume 'discount'. Normal customers didn't get this. Thus when you do a weighted GM -- of course it fell a bit (41.2 to 40.2%). Big deal. Look at the top line, look at profitability. I for one, think that the GM concern was overdone.
What we think is meaningless, what analysts write and tell their salesguys is important. Patience.
Do any of you short timer clowns hold any investment more than 72 hours??? Geesshhhh...
The only folks that make money in your deals are your brokers.... what is the trading charge at "www.trailerparktraders.com"... one possum and a bottle of Thunderbird per 100 shares traded?
See you in a year...