Back to top

Analyst Blog

Networking and communication equipment manufacturer, ADTRAN Inc.’s (ADTN - Analyst Report) shares plummeted after the company declared that the volatility in the macroeconomic condition of Europe is hurting its profitability.

ADTRAN’s shares fell $1.74 or almost 7% as the stock closed at $23.47 on Wednesday on Nasdaq. The shares were one of the 10 worst performing stocks on Nasdaq on Wednesday in relative terms.

On Jul 9, 2013, ADTRAN reported better-than-expected second-quarter 2013 financial results, beating the Zacks Consensus Estimate in both the fronts. Strong contributions from the Internetworking and Broadband Access product divisions contributed to the improved results.

Although quarterly total revenue of $162.2 million declined 11.8% annually, ADTRAN outpaced the Zacks Consensus Estimate of $153.0 million. Similarly, the adjusted earnings per share of 18 cents handsomely beat the Zacks Consensus Estimate of 15 cents. However, a 47.6% decline in operating profit was the most notable of the different financial measures.

Huntsville, Ala.-based ADTRAN expects its overall profitability to decline in the third quarter of 2013. Nevertheless, the company presumes that significant carrier network upgrades and a tight cost control effort will allow it to improve its profitability in the fourth quarter of 2013.

Improved carrier spending along with geographic expansion of business could boost ADTRAN’s top line in the coming quarters, which in turn can improve its profitability. Thus, we believe that although the stock has risen more than 21% since the beginning of the year, there is scope for further improvement.

ADTRAN currently has a Zacks Rank #2 (Buy).

Other Stocks to Consider

Other stocks in this industry that warrant a look include Calix Inc. (CALX - Snapshot Report), Crown Castle International Corp. (CCI - Analyst Report) and Equinix Inc. (EQIX - Analyst Report). All the stocks currently carry a Zacks Rank #2 (Buy).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
CTPARTNERS… CTP 13.33 +3.49%
SAIA INC SAIA 45.65 +1.00%
VASCO DATA… VDSI 13.57 +0.67%
AMEDISYS IN… AMED 20.18 +0.10%
FIRSTSERVIC… FSRV 55.66 -0.13%