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CommScope Boosts Patents Tally With Fractus Suit Settlement

Zacks Equity Research

CommScope Holding Company, Inc. COMM recently augmented its already impressive patent tally with the acquisition of the base station antenna technology from Fractus SA, thereby amicably settling the pending dispute regarding its use. The buyout is likely to translate into incremental revenues for the company by offering an opportunity to serve a wider spectrum of customers for increased 5G deployment.

Based in Barcelona, Spain, Fractus is one of the pioneering companies that developed internal antennas for smartphones, tablets and wireless IoT devices. It licenses antenna and base station patents developed on indigenous technologies to leading handset and base station antenna manufacturers in the world. The company holds intellectual property rights for more than 40 inventions protected through above 120 patents and patent applications in the United States, Europe and Asia.

Fractus’ base station antenna technology enabled superior operation in multiple frequency bands utilizing a compact design. The CommScope settlement involves the technology transfer for the entire portfolio of Fractus’ base station antenna patents. Notably, CommScope holds about 1,500 patents worldwide on its own, including more than 700 related to base station antenna technology. Consequently, the extensive portfolio of base station antenna systems is likely to help operators improve their network capabilities for increased 5G deployment.

Moving forward, CommScope aims to optimize its excellent customer relationship and competitive position for healthy mobility solutions business, as communication service providers continue to build their networks to increase capacity and coverage. The company remains focused on sound technology, highly efficient supply chain and product improvement. This should make it a preferred partner for all telecommunications businesses as the industry shifts to 5G. With operators moving toward converged or multi-use network structures, combining voice, video and data communications into a single network, the company is actively developing solutions designed to support wireline and wireless network convergence, which is crucial for the success of 5G technology.

CommScope has long-term earnings growth expectation of 16.3%. The stock has lost 31.6% against the industry’s growth of 15.2% in the year-to-date period.

The company is dealing with lower-than-expected performance in the connectivity solutions business. Nevertheless, it is likely to benefit from favorable networking market dynamics and anticipates improving trends through 2019 and beyond, while creating shareholder value.

CommScope currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the industry are Superconductor Technologies Inc. SCON, Nokia Corp. NOK and Zayo Group Holdings, Inc. ZAYO, each carrying a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Superconductor Technologies surpassed earnings estimates twice in the trailing four quarters, the average surprise being 110.4%.

Nokia surpassed earnings estimates thrice in the trailing four quarters, the average positive surprise being 89.3%.

Zayo delivered average earnings surprise of 4.6% in the trailing four quarters.

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