Andrews to sell off its Satellite Business

In announcing its financial results for the quarter ended March 31, 2007 earlier this week, Andrew Corporation let it be known that it is planning to sell its satellite communications equipment business, as it now considers that business to be non-core to its future activities. The company refused to be drawn on when the sale would go through, nor would it say how much it expected to raise from the sale or which companies were likely to buy it. Nevertheless, Andrew has confirmed that it has received "several expressions of interest" for the unit, which accounts for around 6% of annual revenues.

The announcement came as Andrew reported a net loss of approximately US$2.0 million for the quarter ended March 31, 2007; this compares with a net profit of US$3.6 million reported for the same period in 2006. The company has attributed the loss to a slowdown in orders from two of its largest customers which have recently merged and which are now rationalising their purchasing plans.

The customers were not formally identified, but Andrew's annual report for the period ended September 30, 2006 as well as its Form 10-Q documents for the subsequent two quarters have named Alcatel-Lucent, Nokia Group, Siemens AG, and Sprint Nextel Corporation as each having accounted for more than 5% of sales. Alcatel-Lucent and Sprint Nextel are both continuing to undertake corporate restructuring programmes as a result of their recent mergers, while Nokia and Siemens formed the equally-owned Nokia Siemens Networks joint venture in April this year, to pool their networking and carrier equipment businesses.

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