Pace plc buyer warns on revenues and earnings after ‘stronger than expected headwinds’

The global leader in entertainment and communications solutions today announced updated guidance for the second quarter of 2015.

“The headwinds we faced in the second quarter were stronger than anticipated resulting in the update to our second quarter 2015 revenue and earnings guidance,” said Bob Stanzione, ARRIS chairman and CEO.

“Our business continues to be impacted by external factors, most notably the various pending industry consolidations and by the strengthening of the US dollar.

“At this point, we anticipate that these factors will continue to impact us in the second half of 2015.

“We expect the Pace plc acquisition to help counter some of these industry conditions as a result of anticipated synergies and a more diversified customer base and product portfolio.

“The combination is proceeding as expected, with regulatory approvals recently received from both Germany and South Africa.

“We continue to anticipate closing the combination in the fourth quarter of 2015.

“We will provide additional details and commentary during our upcoming second quarter earnings call on July 29, 2015.”

The Pace deal, which involves the creation of a new company that will be incorporated in the UK, will help Arris reduce corporate taxes​ and ​expand its operations outside North America.

The deal comes at a time when the traditional video service industry is being shaken up by “over-the-top” services, which allow consumers to stream videos through a high-speed broadband connection.

Both ​Pace and ​Arris make products that are used by telecommunications carriers to deliver these services, which are becoming increasingly popular as viewers shift away from cable TV services.