Equipment Manufacturers Are Singing the Blues

After the four major carriers released their third quarter earnings reports, the stocks of telecom equipment manufacturers plummeted due to one main reason. That factor was AT&T’s announcement that they will decrease their capex next year by 14%.For example, after Cisco reported their earnings, the company’s stock rose slightly but fell 1 percent after AT&T’s decision to slow spending. “Service provider is the big challenge…that’s due to two to three U.S. service providers who have dramatically slowed the order rates with us,” Chief Executive John Chambers said on the quarterly conference call. According to Reuters, revenue from U.S. service providers dropped 18 percent, while it declined 6 percent in emerging countries According to Bidness Etc, “Tower companies were also affected by AT&T’s announcement. SBA Communications fell 1.17%, American Tower was down 0.17%, while Crown Castle International gained 0.41% in yesterday’s [November 10] trading”.