Overview

• US communications tech firm's fiscal Q3 revenue fell 16% yr/yr as satellite segment sales declined

• Net loss attributable to common shareholders narrowed slightly to $14.3 mln from $14.5 mln

• Company agreed to sell most of its Satellite and Space Communications unit for $157.5 mln

Outlook

• Company expects transition to public safety technologies to drive future growth

• Company says recurring revenue and new emergency communication technologies expected to support growth

• Comtech cites revenue visibility of about $1.1 bln from backlog and multi-year contracts

Result Drivers

• SATELLITE SALES PHASE-OUT - Revenue decline mainly due to planned elimination of low-margin and working capital-intensive sales in S&S segment

• GROSS MARGIN IMPROVEMENT - Higher gross profit margin driven by operational efficiency, product mix changes and focus on higher-margin products

• POSITIVE CASH FLOW - Fifth straight quarter of positive operating cash flow due to improved working capital management and process discipline

Company press release: ID:nBw4M0WlTa

Key Details

Metric	Beat/Miss	Actual	Consensus Estimate
Q3 Net Income		-$14.30 mln
Q3 Operating Income		-$3.10 mln

Analyst Coverage

• The one available analyst rating on the shares is "buy"

• The average consensus recommendation for the communications & networking peer group is "buy"

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