ADTRAN (NASDAQ:ADTN) Announces Earnings Results, Misses Estimates By $0.06 EPS

ADTRAN (NASDAQ:ADTN) issued its quarterly earnings results on Tuesday. The communications equipment provider reported $0.04 earnings per share for the quarter, missing analysts’ consensus estimates of $0.10 by ($0.06), FiscalAI reports. ADTRAN had a positive return on equity of 10.94% and a negative net margin of 3.18%.The company had revenue of $281.15 million during the quarter, compared to analysts’ expectations of $290.19 million. ADTRAN’s quarterly revenue was up 6.0% on a year-over-year basis.

Here are the key takeaways from ADTRAN’s conference call:

• Q2 results missed expectations, with revenue of $281.1 million and non-GAAP operating margin of 3.8%, as a delayed project at one customer, unfavorable mix and supply constraints reduced shipments of higher-margin products.
• The company guided for Q3 revenue of $275 million–$295 million and non-GAAP operating margin of 1.5%–5.5%, while noting that the customer delay is not expected to rebound in the quarter and component availability may remain tight.
• Optical Networking revenue rose 22% year over year to $109.7 million, supported by demand for higher-bandwidth infrastructure, data-center interconnect and AI-related networking; management expects optical revenue to continue growing in Q3.
• Diversification continued to gain traction, with enterprise, government and cloud revenue up 47% year over year and hyperscaler revenue up 97%, while upcoming MicroMux Quattro and LiteWave800 products are attracting interest from multiple hyperscalers.
• ADTRAN completed a refinancing that lowers borrowing costs by 200 basis points and extends maturities to 2031, while generating $25.9 million of operating cash flow and $8.7 million of free cash flow in Q2.

ADTRAN Stock Up 0.2%

ADTN stock traded up $0.02 during midday trading on Tuesday, reaching $8.88. The company had a trading volume of 273,280 shares, compared to its average volume of 2,059,806. ADTRAN has a 1 year low of $7.11 and a 1 year high of $19.98. The company has a current ratio of 1.77, a quick ratio of 1.18 and a debt-to-equity ratio of 1.59. The company has a market capitalization of $723.44 million, a P/E ratio of -22.75 and a beta of 1.47. The company has a 50 day moving average of $13.55 and a two-hundred day moving average of $12.76.

Institutional Trading of ADTRAN

Hedge funds and other institutional investors have recently modified their holdings of the company. Kestra Advisory Services LLC acquired a new position in ADTRAN in the 4th quarter worth about $36,000. Quarry LP acquired a new stake in shares of ADTRAN during the 3rd quarter valued at about $36,000. Caitong International Asset Management Co. Ltd acquired a new stake in shares of ADTRAN during the 4th quarter valued at about $47,000. Freestone Grove Partners LP bought a new stake in shares of ADTRAN in the 4th quarter valued at approximately $87,000. Finally, Twinbeech Capital LP acquired a new position in ADTRAN in the fourth quarter worth approximately $96,000. 80.56% of the stock is currently owned by hedge funds and other institutional investors.

Wall Street Analyst Weigh In

Several research analysts have recently weighed in on the stock. Rosenblatt Securities reissued a “buy” rating and issued a $20.00 target price on shares of ADTRAN in a research report on Thursday, July 23rd. Needham & Company LLC decreased their price objective on shares of ADTRAN from $18.00 to $14.00 and set a “buy” rating for the company in a research note on Thursday, July 23rd. B. Riley Financial reiterated a “buy” rating and set a $21.00 price objective (down from $23.00) on shares of ADTRAN in a research report on Thursday, July 23rd. Wall Street Zen downgraded shares of ADTRAN from a “strong-buy” rating to a “buy” rating in a research note on Tuesday, July 28th. Finally, Evercore started coverage on ADTRAN in a report on Tuesday, April 14th. They issued an “outperform” rating and a $18.00 target price for the company. Four research analysts have rated the stock with a Buy rating, one has issued a Hold rating and one has given a Sell rating to the company. According to MarketBeat.com, the stock has a consensus rating of “Moderate Buy” and a consensus price target of $18.20.

ADTRAN Company Profile

ADTRAN, Inc is a global provider of networking and communications equipment, specializing in broadband access solutions for service providers, enterprises and government organizations. Founded in 1985 and headquartered in Huntsville, Alabama, the company develops and delivers hardware and software platforms that enable high-speed Internet access over fiber, copper and wireless networks. Its core offerings include fiber access and aggregation equipment, Ethernet switches, customer premises equipment (CPE) and network management systems designed to support both legacy and next-generation broadband deployments.

The company’s product portfolio encompasses a broad range of optical line terminals (OLTs), optical network terminals (ONTs), multiservice access gateways and virtualized access solutions.