On The Insider: Robert Downey Jr Injured on the Set

CommScope Q3 2007 Earnings Call Transcript

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2007-10-30 17:25:54.0

Tags: CommScope Inc.

Question-and-Answer Session

Operator

Thank you. (Operator Instructions). One moment, please, for our first question. And our first question is from Celeste Santangelo from Merrill Lynch. Please go ahead.

Celeste Santangelo - Merrill Lynch

Good afternoon.

Frank Drendel

Hi, Celeste.

Celeste Santangelo - Merrill Lynch

Hi. What type of growth by segment did you incorporate into your outlook for only modest growth in 2008?

Jearld Leonhardt

Celeste, we do expect growth in all segments and are very positive about next year. But our growth rate this year was in the 20% sort of range for the year, and so we expect that that will not be growing at those types of rate.

Frank Drendel

Celeste, it's Frank. We clearly were looking at, hopefully, in the single digit growth rates. And obviously, there are all kinds of opportunities with the integration of Andrew to put some of those things together in that opportunity.

Celeste Santangelo - Merrill Lynch

Okay. And then what specific impact on margin expectations for the core business next year from that outlook?

Jearld Leonhardt

The margin improvement?

Celeste Santangelo - Merrill Lynch

Where were the margin expectations for the core business for this outlook?

Jearld Leonhardt

Well, Celeste, we've been growing margin this year. We're very pleased with the results of that growth with most recent quarters in the mid teens sort of range. We expect next year that our operating income, overall, will be growing more or less in line with our sales growth as we move forward.

Celeste Santangelo - Merrill Lynch

Yeah.

Frank Drendel

If you can appreciate, there are all kinds of opportunities with manufacturing level, the cost level and the margin improvement level with this combination of two companies. So obviously, we expect to have a substantial improvement across the board in every one of these areas.

Celeste Santangelo - Merrill Lynch

Okay. And then, just looking from now from Q3 going into Q4, looking at maybe midpoint of your outlook on the operating margin line more than 400 basis points declined, could you kind of quantify what's in there as far as volumes, raw materials?

Jearld Leonhardt

The biggest piece there is certainly volumes. If you look back at last year of our change in operating volumes and operating margins from the third quarter to the fourth quarter, you will see a somewhat sort of decrease.

Celeste Santangelo - Merrill Lynch

Okay. And then, just one last one. Could you talk about your expectations for wireless and demand in '08 for the product that you and Andrew sell?

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