Powerwave and AT&T CAPEX
Almost two weeks ago I posted about APKT and AT&T CAPEX. You can read it here. I wrote “Two days ago APKT pre-announced a Q3 miss due to a delayed order from AT&T. The question is why did AT&T push out an order from Q3 to Q4 as the CEO stated? Was it just a delayed PO in a larger multi-vendor deal or something else? There is another theory that occurred to me today and that is ATT is in the middle of a fight with the DoJ over acquiring T-Mobile. When a company spends $20B a year in CAPEX and has 294k employees, it has the assets to make a statement. It is just a possibility.”
After the close PWAV guided Q3 revenues to be -60% from prior guidance. On the call, the CEO clearly stated “…in the North American market, we believe that the uncertainty has been added to the market, given the government’s recent opposition to the proposed merger of AT&T and T-Mobile, which we believe has led to delays in spending of these operators, and they are reevaluating their capital spending plans.”
The question is how significant and broad are these delays? JNPR reported tonight and the results do not seem to reflect any additional weakness than what was already expected. In two days we will get the full AT&T and we might be able to see if there is a CAPEX slowdown or a shift in spending priorities.
* It is all about the network stupid, because it is all about compute. *
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