ADTRAN Earnings: Margins Suffer for Five Quarters Straight, Profit Drops

ADTRAN Inc. (NASDAQ:ADTN) saw profit fall amid falling revenue. Adtran designs, manufactures, markets, and services network access solutions for communications networks.

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ADTRAN Earnings Cheat Sheet for the Third Quarter

Results: Net income for ADTRAN Inc. fell to $9.3 million (15 cents per share) vs. $36.2 million (56 cents per share) a year earlier. This is a decline of 74.4% from the year-earlier quarter.

Revenue: Fell 15.6% to $162.1 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: ADTRAN Inc. fell short of the mean analyst estimate of 31 cents per share. It fell short of the average revenue estimate of $190.2 million.

Quoting Management: ADTRAN Chief Executive Officer Tom Stanton stated, “This quarter’s performance came in line with our revised expectations. Although current market conditions limit near term visibility, we are confident that our market share position and globalization efforts will lead to significantly better performance in the future.”

Key Stats:

The company has now seen net income fall in each of the last four quarters. In the second quarter, net income fell 43% while the figure fell 62.2% in the first quarter and 13.3% in the fourth quarter of the last fiscal year.

Last quarter marked the fifth straight quarter that the company saw shrinking gross margins, as gross margin fell 7.6 percentage points to 49.3% from the year-earlier quarter. In that span, margins have contracted an average of 4.7 percentage points per quarter on a year-over-year basis.

Revenue has been on the decline for three quarters in a row. In the second quarter, revenue declined 0.1% to $184 million while the figure fell 18.6% in the first quarter from the year earlier.

The company fell short of estimates last quarter after being in line with expectations the quarter before with net income of 35 cents.

Looking Forward: Over the past sixty days, the outlook for the company’s performance next quarter has become increasingly unfavorable. The average estimate for the fourth quarter is 36 cents per share, a drop from 54 cents. For the fiscal year, the average estimate has moved down from $1.64 a share to $1.20 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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