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In an attempt to enhance shareholders’ return, communication network solution provider, ADTRAN Inc. (ADTN - Analyst Report) announced that its board of directors has authorized an additional share repurchase plan. The new plan will commence following the completion of the current share repurchase plan, which was announced on Oct 2011.

The additional share buyback is a continuation of ADTRAN’s share buyback policy, as the company authorized a similar share repurchase plan of an additional 5 million common stocks at the end of third-quarter 2011. At the end of the recently ended quarter, ADTRAN had 506,538 shares left to be repurchased from its previous plan.

Per the new plan, ADTRAN will buyback additional 5 million shares and will be implemented through open market transaction or through privately-negotiated deals. Nevertheless, the share buyback timing will depend on the market condition. The shareholders also reacted positively to the news as the stock price soared nearly 2% in the Thursday trade on Nasdaq.

Recently, ADTRAN reported better-than-expected first-quarter 2013 financial results, beating the Zacks Consensus Estimate in both the fronts. The results were positively impacted by an improved spending atmosphere and increased strategic investment on the part of the carrier customers of the company, which includes Verizon Communication Inc. (VZ - Analyst Report) and AT&T Inc. (T - Analyst Report).

ADTRAN has sufficient cash to carry out this program. The company exited the first quarter of fiscal 2013 with $247.9 million of cash & marketable securities and with an outstanding debt of around $46 million. Thus, we believe that the company’s plans to renew its share buyback plan will not only boost its share prices but will also drive the company’s earnings per share, going forward.

Currently, ADTRAN carries a Zacks Rank #3 (Hold). Another stock in the same industry which is worth considering is Infinera Corp. (INFN - Snapshot Report). Currently, the stock carries a Zacks Rank #2 (Buy).

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