Private equity firm Carlyle – the biggest owner of CommScope (Nasdaq: COMM) – triggered a 5 percent drop in the networking firm’s shares Tuesday when it moved to sell 10 percent of its holdings.

However, shares rallied strongly in the afternoon to finish up 6 cents for the day at $24.49. Shares surged as high as $24.81 before dropping back near the end of the day.

Monday after the markets close, Hickory-based CommScope disclosed that an affiliate of Carlyle planned to sell 17.5 million shares. Underwriters have a 30-day option to purchase another 2.6 million shares.

Nearly 880,000 shares were traded compared to the daily average of just over 500,000.

CommScope had  closed at $24.43 Monday, up sharply from last Thursday when the company bumped up its earnings forecast due to strong wireless market sales.

But as markets opened Tuesday, shares dipped as low as $23.16.

By late morning, shares had regained some ground but still traded below $24.

CommScope went public at $15 a share last October – a price below expectations.

Carlyle is the firm’s biggest shareholder at 76 percent of shares, according to Yahoo! Finance.

Last week, shares jumped as high as 15 percent after the earnings revision.

“We are very pleased to see strength in our wireless business,” said Mark Olson, CommScope executive vice president and chief financial officer, after the markets closed on Thursday. “North American wireless operators continue to invest in our macro cell site and small cell distributed antenna system (DAS) solutions to improve network coverage and capacity. We are also seeing ongoing modernization of 3G wireless networks around the globe.”

New Guidance

First Quarter guidance from CommScope:

  • Sales of $900 million to $925 million, up 13 percent year over year at the midpoint of the range.
  • Adjusted operating income of $175 million to $185 million, up 36 percent year over year at the midpoint of the range.
  • Adjusted earnings per diluted share of $0.43 to $0.47, up 29 percent year over year at the midpoint of the range. The first quarter earnings range assumes 191 million weighted average diluted shares outstanding.

Full year guidance:

  • Sales growth in the mid-single digits
  • Adjusted operating margins up modestly
  • Adjusted effective tax rate trending toward long-term target of 35% – 37%
  • Double-digit adjusted net income growth
  • Low double-digit adjusted EPS growth, reflecting the higher year-over-year share count