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ADTRAN (ADTN) Misses on Q4 Earnings Despite Higher Revenues
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ADTRAN Holdings, Inc. (ADTN - Free Report) reported soft fourth-quarter 2022 results, wherein both the bottom line and top line missed the respective Zacks Consensus Estimate. However, revenues more than doubled on a year-over-year basis.
Net Income
On a GAAP basis, net income in the December quarter was $38.9 million or 49 cents per share against a loss of $4.2 million or a loss of 9 cents per share in the prior-year quarter. The year-over-year improvement despite the higher cost of revenues and operating expenses was primarily due to top-line growth and income tax benefit during the reported quarter. Non-GAAP net income was $9.9 million or 12 cents per share, which missed the Zacks Consensus Estimate of 16 cents.
In 2022, GAAP loss was $2 million or a loss of 3 cents per share compared with a loss of $8.6 million or a loss of 18 cents per share in 2021. Non-GAAP net income in 2022 was $37.2 million or 60 cents per share compared with $18.4 million or 38 cents per share in 2021.
ADTRAN Holdings, Inc. Price, Consensus and EPS Surprise
Quarterly total revenues more than doubled to $358.3 million from $154.2 million in the prior-year quarter, driven by the increasing demand for ADTRAN’s network solutions and fiber broadband products. The top line missed the consensus estimate of $362 million. In 2022, revenues improved to $1,025.5 million from $563 million in 2021.
Revenues from Network Solutions in the reported quarter were $317.5 million compared with $138.8 million in the year-ago quarter, with incremental contribution from ADVA.ADTRAN completed the buyout of ADVA in July. The company recorded healthy demand trends driven by the accelerated expansion of fiber-to-the-home networks, upgrades to in-home Wi-Fi connectivity and the adoption of cloud-based automation tools. The solid quarterly performance was further buoyed by improved customer diversification and end-to-end fiber broadband solutions. Services and Support revenues were $40.8 million, up from $15.3 million.
Other Details
Total cost of sales increased from $99.7 million to $250.9 million. GAAP gross profit came in at $107.4 million compared with $54.4 million in the prior-year quarter. Operating loss in the quarter was $32.9 million compared with an operating loss of $7.2 million in the year-ago quarter.
Cash Flow & Liquidity
In 2022, ADTRAN used $43.5 million of cash in operating activities against an operating cash flow of $3 million in 2021. As of Dec 31, 2022, the company had $108.6 million in cash and cash equivalents with $26.7 million of deferred compensation liability compared with the respective tallies of $56.6 million and $31.4 million in the prior-year period.
Zacks Rank & Stocks to Consider
ADTRAN currently has a Zacks Rank #5 (Strong Sell).
Arista Networks, Inc. (ANET - Free Report) , sporting a Zacks Rank #1, is likely to benefit from the strong momentum and diversification across its top verticals and product lines. The company has a software-driven, data-centric approach to help customers build their cloud architecture and enhance their cloud experience. Arista has a long-term earnings growth expectation of 17.5% and delivered an earnings surprise of 12.7%, on average, in the trailing four quarters.
It holds a leadership position in 100-gigabit Ethernet switching share in port for the high-speed datacenter segment. Arista is increasingly gaining market traction in 200- and 400-gig high-performance switching products and remains well-positioned for healthy growth in data-driven cloud networking business with proactive platforms and predictive operations.
Viavi Solutions Inc. (VIAV - Free Report) , carrying a Zacks Rank #2 (Buy), is a key pick. Headquartered in Scottsdale, AZ, Viavi is a leading provider of network test, monitoring and service enablement solutions to diverse sectors across the globe. The product portfolio of the company offers end-to-end network visibility and analytics that help build, test, certify, maintain, and optimize complex physical and virtual networks.
Viavi also offers high-performance thin film optical coatings for light-management solutions used in anti-counterfeiting, 3D sensing, electronics, automotive, defense and instrumentation markets. It delivered an earnings surprise of 9.1%, on average, in the trailing four quarters.
T-Mobile US, Inc. (TMUS - Free Report) , carrying a Zacks Rank #2, is another key pick. Headquartered in Bellevue, WA, T-Mobile is a national wireless service provider. The company offers its services under the T-Mobile, Metro by T-Mobile and Sprint brands. T-Mobile, through its subsidiaries, provides wireless services for branded postpaid and prepaid, and wholesale customers.
It delivered a trailing four-quarter earnings surprise of 212.7%, on average. T-Mobile has a long-term earnings growth expectation of 67.6%.
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ADTRAN (ADTN) Misses on Q4 Earnings Despite Higher Revenues
ADTRAN Holdings, Inc. (ADTN - Free Report) reported soft fourth-quarter 2022 results, wherein both the bottom line and top line missed the respective Zacks Consensus Estimate. However, revenues more than doubled on a year-over-year basis.
Net Income
On a GAAP basis, net income in the December quarter was $38.9 million or 49 cents per share against a loss of $4.2 million or a loss of 9 cents per share in the prior-year quarter. The year-over-year improvement despite the higher cost of revenues and operating expenses was primarily due to top-line growth and income tax benefit during the reported quarter. Non-GAAP net income was $9.9 million or 12 cents per share, which missed the Zacks Consensus Estimate of 16 cents.
In 2022, GAAP loss was $2 million or a loss of 3 cents per share compared with a loss of $8.6 million or a loss of 18 cents per share in 2021. Non-GAAP net income in 2022 was $37.2 million or 60 cents per share compared with $18.4 million or 38 cents per share in 2021.
ADTRAN Holdings, Inc. Price, Consensus and EPS Surprise
ADTRAN Holdings, Inc. price-consensus-eps-surprise-chart | ADTRAN Holdings, Inc. Quote
Revenues
Quarterly total revenues more than doubled to $358.3 million from $154.2 million in the prior-year quarter, driven by the increasing demand for ADTRAN’s network solutions and fiber broadband products. The top line missed the consensus estimate of $362 million. In 2022, revenues improved to $1,025.5 million from $563 million in 2021.
Revenues from Network Solutions in the reported quarter were $317.5 million compared with $138.8 million in the year-ago quarter, with incremental contribution from ADVA.ADTRAN completed the buyout of ADVA in July. The company recorded healthy demand trends driven by the accelerated expansion of fiber-to-the-home networks, upgrades to in-home Wi-Fi connectivity and the adoption of cloud-based automation tools. The solid quarterly performance was further buoyed by improved customer diversification and end-to-end fiber broadband solutions. Services and Support revenues were $40.8 million, up from $15.3 million.
Other Details
Total cost of sales increased from $99.7 million to $250.9 million. GAAP gross profit came in at $107.4 million compared with $54.4 million in the prior-year quarter. Operating loss in the quarter was $32.9 million compared with an operating loss of $7.2 million in the year-ago quarter.
Cash Flow & Liquidity
In 2022, ADTRAN used $43.5 million of cash in operating activities against an operating cash flow of $3 million in 2021. As of Dec 31, 2022, the company had $108.6 million in cash and cash equivalents with $26.7 million of deferred compensation liability compared with the respective tallies of $56.6 million and $31.4 million in the prior-year period.
Zacks Rank & Stocks to Consider
ADTRAN currently has a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Arista Networks, Inc. (ANET - Free Report) , sporting a Zacks Rank #1, is likely to benefit from the strong momentum and diversification across its top verticals and product lines. The company has a software-driven, data-centric approach to help customers build their cloud architecture and enhance their cloud experience. Arista has a long-term earnings growth expectation of 17.5% and delivered an earnings surprise of 12.7%, on average, in the trailing four quarters.
It holds a leadership position in 100-gigabit Ethernet switching share in port for the high-speed datacenter segment. Arista is increasingly gaining market traction in 200- and 400-gig high-performance switching products and remains well-positioned for healthy growth in data-driven cloud networking business with proactive platforms and predictive operations.
Viavi Solutions Inc. (VIAV - Free Report) , carrying a Zacks Rank #2 (Buy), is a key pick. Headquartered in Scottsdale, AZ, Viavi is a leading provider of network test, monitoring and service enablement solutions to diverse sectors across the globe. The product portfolio of the company offers end-to-end network visibility and analytics that help build, test, certify, maintain, and optimize complex physical and virtual networks.
Viavi also offers high-performance thin film optical coatings for light-management solutions used in anti-counterfeiting, 3D sensing, electronics, automotive, defense and instrumentation markets. It delivered an earnings surprise of 9.1%, on average, in the trailing four quarters.
T-Mobile US, Inc. (TMUS - Free Report) , carrying a Zacks Rank #2, is another key pick. Headquartered in Bellevue, WA, T-Mobile is a national wireless service provider. The company offers its services under the T-Mobile, Metro by T-Mobile and Sprint brands. T-Mobile, through its subsidiaries, provides wireless services for branded postpaid and prepaid, and wholesale customers.
It delivered a trailing four-quarter earnings surprise of 212.7%, on average. T-Mobile has a long-term earnings growth expectation of 67.6%.