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ADTRAN Earns More Than Expected

Zacks Equity Research

Communication network solution provider ADTRAN Inc. (ADTN) reported better-than-expected first quarter of 2013 financial results, owing to strong contributions from the carrier and enterprise divisions. The results were positively impacted by an improved spending atmosphere and increased strategic investment on the part of the carrier customers of the company. ADTRAN currently has a Zacks Rank #3 (Hold).

Quarterly GAAP net income was $7.9 million or 13 cents per share compared with a net income of $13 million or 20 cents per share in the year-ago quarter. However, first quarter of 2013 adjusted earnings per share were14 cents, significantly higher than the Zacks Consensus Estimate of 8 cents per share.

The company reported quarterly total revenue of $143 million, up 6.1% year over year and slightly better than the Zacks Consensus Estimate of $141 million.

Quarterly gross margin was 48.7% compared with 55% in the prior-year quarter. Operating income registered a steep drop of 59.4% year over year to $6.6 million.

Quarterly operating margin was 6.8% compared with 14.9% in the prior-year quarter. The company’s board of directors declared a cash dividend of 9 cents per share for the quarter. The dividend will be paid on May 9 to shareholders of record as of Apr 25.

During the first quarter of 2013, ADTRAN generated $26.3 million of cash from operation compared with $24.5 million in the year-ago quarter. Free cash flow, in the reported quarter was $25.5 million compared with $20.5 million in the prior-year quarter.

At the end of the first quarter of 2013, cash and marketable securities were $247.9 million compared with $228.9 million at the end of 2012. Total debt, at the end of the reported quarter was $46 million, remaining same to the end of 2012.  

Other Stocks to Consider

Other stocks in this industry that warrant a look includes Cisco Systems Inc. (CSCO), Brocade Communications Systems Inc. (BRCD) and Infinera Corp. (INFN). All these stocks carry a Zacks Rank #2 (Buy).

Read the Full Research Report on ADTN

Read the Full Research Report on CSCO

Read the Full Research Report on BRCD

Read the Full Research Report on INFN

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