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ADTRAN (ADTN) Earnings & Revenues Surpass in Q4, Down Y/Y

Zacks Equity Research

ADTRAN Inc. ADTN reported fourth-quarter 2017 results with both the top and the bottom line beating the Zacks Consensus Estimate.

The company’s earnings (excluding 28 cents from non-recurring items) of 5 cents per share compared favorably with the Zacks Consensus Estimate of a loss of 4 cents. The figure excludes the $11.9 million charge pertaining to tax expense from the Tax Cuts and Jobs Act. Earnings however, declined 68.7% year over year.

Total revenues of $126.5 million came in marginally above the consensus mark of $125.9 million. The metric declined 22.4% year over year. Both Product and Service sales decreased 24.2% and 15.8%, respectively, on a year-over-year basis.

As expected, results in the quarter were greatly affected by a merger-related review and a slowdown in its spending at a domestic Tier 1 customer.
 
The massive year-over-year fall in earnings and revenues seemed to have displeased investors. Consequently, the stock fell 3.3% since the earnings release on Jan 16.

Quarterly gross margin came in at 46.5% compared with 43.4% in the prior-year period. Operating loss in the reported quarter totaled $4,068 million compared with operating income of $4,272 million in the year-ago quarter.

At the end of the fourth quarter, ADTRAN reported $42,370 million of cash used in operations compared with $42,002 million cash generated from operations a year ago. ADTRAN exited the fourth quarter with cash and cash equivalents of $86,433 million compared with $79,895 million in the year-ago period.

 

ADTRAN, Inc. Price, Consensus and EPS Surprise

 

ADTRAN, Inc. Price, Consensus and EPS Surprise | ADTRAN, Inc. Quote

 

Dividend

The company declared a cash dividend of 9 cents per share in the final quarter, payable on Feb 14 to shareholders of record as of Jan 31.

Zacks Rank & Key Picks

ADTRAN carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the broader Computer and Technology sector are Analog Devices, Inc. ADI, Analogic Corporation ALOG and AMTEK, Inc. AME. While Analog Devices sports a Zacks Rank #1 (Strong Buy), Analogic Corporation and AMTEK carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of Analog Devices, Analogic Corporation and AMTEK have rallied more than 18%, 17% and 23%, respectively, in the last six months.

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