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ADTRAN, Inc. (ADTN - Free Report) reported impressive third-quarter 2020 results, with the bottom and the top line increasing on a year-over-year basis. Despite COVID-19 woes, accretive customer base and higher revenues from the Network Solutions segment on the back of software innovations boosted the performance.
Bottom Line
On a GAAP basis, net income for the September quarter was $5.5 million or 11 cents per share against a net loss of $46.1 million or loss of 96 cents per share in the year-ago quarter. The drastic improvement was primarily driven by an operating income and lower income tax.
Non-GAAP net income came in at $7.9 million or 16 cents per share against a net loss of $2.8 million or loss of 6 cents per share in the prior-year quarter. The bottom line beat the Zacks Consensus Estimate by 9 cents.
Quarterly revenues amounted to $133.1 million compared with $114.1 million in the year-earlier quarter. The 16.7% year-over-year jump was primarily driven by higher revenues from the Network Solutions segment. Solid customer traction with broad-based growth of market segments despite the COVID-19 mayhem also played a vital role. However, the top line lagged the consensus estimate of $134 million.
Sales from the Network Solutions segment came in at $115.2 million compared with $94 million in the prior-year quarter. The 22.6% year-over-year increase was mainly bolstered by latest fiber access advancements on the back of favorable technology and competitive factors. However, sales from the Services & Support segment were $17.9 million, down 10.8% from $20.1 million in the year-ago quarter.
Other Details
Total cost of sales increased from $67.8 million to $74.2 million. Gross profit came in at $59 million compared with $46.3 million in the prior-year quarter. Operating income for the quarter was $4.5 million against an operating loss of $20.3 million in the year-ago quarter.
The company announced that its board of directors approved a quarterly cash dividend of 9 cents per share to shareholders on record as of Nov 17, payable on Dec 1.
Cash Flow & Liquidity
In the first nine months of 2020, ADTRAN utilized $5.3 million of net cash in operating activities against $10.1 million of net cash generated from operating activities in the year-ago period. As of Sep 30, the networking equipment maker had $71.1 million in cash and cash equivalents with $107 million of total current liabilities.
Going Forward
Despite challenging macroeconomic conditions triggered by the COVID-19 pandemic, ADTRAN emerged as a strong player and witnessed robust demand in service provider markets. The company continues to optimize its customer, geographic and product diversity momentum as communications service providers scale up their network capabilities.
The company added 38 new service provider customers during the quarter and has been selected by numerous Tier 1 operators for its diversified portfolio of software-defined access, fiber extension and 10G PON solutions. Moreover, its strategy of diversification across the globe along with technological advancements instills confidence.
Calix delivered a trailing four-quarter positive earnings surprise of 72.2%, on average.
Badger Meter delivered a trailing four-quarter positive earnings surprise of 5.4%, on average.
Sensata delivered a trailing four-quarter positive earnings surprise of 6.7%, on average.
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ADTRAN (ADTN) Q3 Earnings Beat Estimates, Revenues Jump Y/Y
ADTRAN, Inc. (ADTN - Free Report) reported impressive third-quarter 2020 results, with the bottom and the top line increasing on a year-over-year basis. Despite COVID-19 woes, accretive customer base and higher revenues from the Network Solutions segment on the back of software innovations boosted the performance.
Bottom Line
On a GAAP basis, net income for the September quarter was $5.5 million or 11 cents per share against a net loss of $46.1 million or loss of 96 cents per share in the year-ago quarter. The drastic improvement was primarily driven by an operating income and lower income tax.
Non-GAAP net income came in at $7.9 million or 16 cents per share against a net loss of $2.8 million or loss of 6 cents per share in the prior-year quarter. The bottom line beat the Zacks Consensus Estimate by 9 cents.
ADTRAN, Inc. Price, Consensus and EPS Surprise
ADTRAN, Inc. price-consensus-eps-surprise-chart | ADTRAN, Inc. Quote
Revenues
Quarterly revenues amounted to $133.1 million compared with $114.1 million in the year-earlier quarter. The 16.7% year-over-year jump was primarily driven by higher revenues from the Network Solutions segment. Solid customer traction with broad-based growth of market segments despite the COVID-19 mayhem also played a vital role. However, the top line lagged the consensus estimate of $134 million.
Sales from the Network Solutions segment came in at $115.2 million compared with $94 million in the prior-year quarter. The 22.6% year-over-year increase was mainly bolstered by latest fiber access advancements on the back of favorable technology and competitive factors. However, sales from the Services & Support segment were $17.9 million, down 10.8% from $20.1 million in the year-ago quarter.
Other Details
Total cost of sales increased from $67.8 million to $74.2 million. Gross profit came in at $59 million compared with $46.3 million in the prior-year quarter. Operating income for the quarter was $4.5 million against an operating loss of $20.3 million in the year-ago quarter.
The company announced that its board of directors approved a quarterly cash dividend of 9 cents per share to shareholders on record as of Nov 17, payable on Dec 1.
Cash Flow & Liquidity
In the first nine months of 2020, ADTRAN utilized $5.3 million of net cash in operating activities against $10.1 million of net cash generated from operating activities in the year-ago period. As of Sep 30, the networking equipment maker had $71.1 million in cash and cash equivalents with $107 million of total current liabilities.
Going Forward
Despite challenging macroeconomic conditions triggered by the COVID-19 pandemic, ADTRAN emerged as a strong player and witnessed robust demand in service provider markets. The company continues to optimize its customer, geographic and product diversity momentum as communications service providers scale up their network capabilities.
The company added 38 new service provider customers during the quarter and has been selected by numerous Tier 1 operators for its diversified portfolio of software-defined access, fiber extension and 10G PON solutions. Moreover, its strategy of diversification across the globe along with technological advancements instills confidence.
Zacks Rank & Stocks to Consider
ADTRAN currently has a Zacks Rank #3 (Hold).
A few better-ranked stocks in the broader industry are Calix, Inc. (CALX - Free Report) , Badger Meter, Inc. (BMI - Free Report) and Sensata Technologies Holding plc (ST - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Calix delivered a trailing four-quarter positive earnings surprise of 72.2%, on average.
Badger Meter delivered a trailing four-quarter positive earnings surprise of 5.4%, on average.
Sensata delivered a trailing four-quarter positive earnings surprise of 6.7%, on average.
Legal Marijuana: An Investor’s Dream
Imagine getting in early on a young industry primed to skyrocket from $17.7 billion in 2019 to an expected $73.6 billion by 2027.
Although marijuana stocks did better as the pandemic took hold than the market as a whole, they’ve been pushed down. This is exactly the right time to get in on selected strong companies at a fraction of their value before COVID struck. Zacks’ Special Report, Marijuana Moneymakers, reveals 10 exciting tickers for urgent consideration.
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