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ADTRAN (ADTN) Q2 Loss Narrower Than Expected, Revenues Match

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ADTRAN (ADTN) Q2 Loss Narrower Than Expected, Revenues Match

ADTRAN's (ADTN) second-quarter 2018 bottom line declined year over year on significantly lower revenues.

ADTRAN Inc. ADTN reported soft results in second-quarter 2018 with both the top line and bottom line deteriorating year over year. However, the metrics improved sequentially with solid performance from the international businesses.

GAAP loss for the quarter was $7.7 million or loss of 16 cents per share against earnings of $12.4 million or 26 cents per share in the year-ago quarter. Excluding non-recurring items, non-GAAP loss for the reported quarter was 10 cents per share against earnings of 30 cents in the year-earlier quarter. The figure was narrower than the Zacks Consensus Estimate of a loss of 23 cents. The significant year-over-year decline was primarily due to lower revenues.

ADTRAN, Inc. Price, Consensus and EPS Surprise

 

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

Total revenues for the second quarter were $128 million compared with $184.7 million in the prior-year quarter and were in line with the Zacks Consensus Estimate. Sales at both the segments, namely Products and Services, decreased 26% and 55.3%, respectively, on a year-over-year basis to $115.1 million and $13 million.

Quarterly gross margin came in at 39% compared with 45.8% in the prior-year period. Operating loss in the reported quarter totaled $12.8 million against operating income of $16.4 million a year ago.

Cash flow from operating activities for the first six months of 2018 totaled $52.9 million compared with $20.6 million in the year-ago period. ADTRAN exited the quarter with cash and cash equivalents of $100.3 million. The company maintained its dividend of 9 cents per share for the quarter.

ADTRAN expects improved performance in the coming quarters with continued strength in the European business and a rebound in its North American carrier and cable/MSO business in the second half of 2018.

ADTRAN currently carries a Zacks Rank #5 (Strong Sell). Better-ranked stocks in the industry include Comtech Telecommunications Corp. CMTL, Arista Networks, Inc. ANET and EXFO Inc EXFO, each sporting Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Comtech Telecommunications has a long-term earnings growth expectation of 5%. It delivered an average positive earnings surprise of 123.7% in the trailing four quarters, beating estimates in each.

Arista Networks has a long-term earnings growth expectation of 21.2%. It delivered an average positive earnings surprise of 25.5% in the trailing four quarters, beating estimates in each.

EXFO delivered an average positive earnings surprise of 35.8% in the trailing four quarters, beating estimates thrice.

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