Communication network solution provider, ADTRAN Inc. (ADTN - Analyst Report), reported robust third-quarter 2013 financial results on strong contributions from its Internetworking and Broadband Access product divisions. The results were supported by an improved spending atmosphere and increased strategic investment by its carrier and enterprise customers. International business generated record high revenues. ADTRAN also benefits from lower operating expenses.
In the third quarter of 2013, GAAP net income was $16.2 million or 28 cents per share compared with $9.3 million or 15 cents per share in the year-ago quarter. However, quarterly adjusted earnings per share were 29 cents, significantly above the Zacks Consensus Estimate of 22 cents. The company reported quarterly total revenue of $177.4 million, up 9.4% year over year, outpacing the Zacks Consensus Estimate of $174 million.
Quarterly gross margin was 46.5% compared with 49.7% in the prior-year quarter. However, operating income registered a steep year-over-year rise of 67.5% to $17.2 million. Quarterly operating margin was 9.7% against 6.3% 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 Nov 7 to shareholders of record as of Oct 24.
During the first nine months of 2013, ADTRAN generated $52 million of cash from operations compared with $64.8 million in the year-ago period. Free cash flow, in the reported period, was $45.5 million compared with $54 million in the prior-year quarter. At the end of the third quarter of 2013, cash and marketable securities were $191 million compared with $228.9 million at the end of 2012. Total debt, at the end of the reported quarter, was $46 million, remaining flat with the figure reported at the end of 2012.
Other Stocks to Consider
ADTRAN currently has a Zacks Rank #3 (Hold). Other stocks in this industry that warrant a look includes Harmonic Inc. (HLIT - Snapshot Report), AudioCodes Ltd. (AUDC - Snapshot Report) and Envivio Inc. (ENVI - Snapshot Report). All these stocks currently carry a Zacks Rank #2 (Buy).