Back to top

Image: Bigstock

How Has ADTRAN (ADTN) Performed a Month Post Earnings?

Read MoreHide Full Article

It has been about a month since the last earnings report for ADTRAN, Inc. (ADTN - Free Report) . Shares were flat in that time frame.

Will the recent trend continue leading up to its next earnings release, or is ADTN due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

ADTRAN Q2 Loss Narrower Than Expected, Revenues Match

ADTRAN reported soft results in second-quarter 2018 with both the top line and bottom line deteriorating year over year. However, the metrics improved sequentially with solid performance from the international businesses.

GAAP loss for the quarter was $7.7 million or loss of 16 cents per share against earnings of $12.4 million or 26 cents per share in the year-ago quarter. Excluding non-recurring items, non-GAAP loss for the reported quarter was 10 cents per share against earnings of 30 cents in the year-earlier quarter. The figure was narrower than the Zacks Consensus Estimate of a loss of 23 cents. The significant year-over-year decline was primarily due to lower revenues.

Total revenues for the second quarter were $128 million compared with $184.7 million in the prior-year quarter and were in line with the Zacks Consensus Estimate. Sales at both the segments, namely Products and Services, decreased 26% and 55.3%, respectively, on a year-over-year basis to $115.1 million and $13 million.

Quarterly gross margin came in at 39% compared with 45.8% in the prior-year period. Operating loss in the reported quarter totaled $12.8 million against operating income of $16.4 million a year ago.

Cash flow from operating activities for the first six months of 2018 totaled $52.9 million compared with $20.6 million in the year-ago period. ADTRAN exited the quarter with cash and cash equivalents of $100.3 million. The company maintained its dividend of 9 cents per share for the quarter.

ADTRAN expects improved performance in the coming quarters with continued strength in the European business and a rebound in its North American carrier and cable/MSO business in the second half of 2018.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates. There have been two revisions lower for the current quarter. In the past month, the consensus estimate has shifted downward by 100% due to these changes.

ADTRAN, Inc. Price and Consensus

VGM Scores

At this time, ADTN has a poor Growth Score of F, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Our style scores indicate investors will probably be better served looking elsewhere.

Outlook

Estimates have been broadly trending downward for the stock and the magnitude of these revisions indicates a downward shift. Notably, ADTN has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


ADTRAN Holdings, Inc. (ADTN) - free report >>

Published in