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ADTRAN Beats on Q4 Earnings, Lags Revs

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Communication network solution provider, ADTRAN Inc. (ADTN - Free Report) , reported mixed fourth-quarter 2013 financial results. While net income significantly surpassed the Zacks Consensus Estimate, total revenue fell below the same.

The company reported quarterly total revenue of $159.1 million, up 13.8% year over year, but slightly below the Zacks Consensus Estimate of $160 million. Total revenue also declined 10.3% sequentially. 

In the fourth quarter of 2013, GAAP net income was $11.8 million or 20 cents per share compared with $4 million or 6 cents per share in the year-ago quarter. However, quarterly adjusted earnings per share were 21 cents, significantly above the Zacks Consensus Estimate of 14 cents per share.

Quarterly gross margin was 48.3% compared with 48.2% in the prior-year quarter. However, operating income registered a steep rise of 270.2% year over year to $10.6 million. Quarterly operating margin was 6.7% against 2.1% 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 Feb 20 to shareholders of record as of Feb 6.

The company improved its year-over-year performance 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.

During fiscal 2013, ADTRAN generated $60.1 million of cash from operations compared with $85.6 million in fiscal 2012. Free cash flow, in fiscal 2013, was $51.6 million compared with $73.6 million in fiscal 2012.

At the end of fiscal 2013, cash and marketable securities were $164.1 million compared with $228.9 million at the end of fiscal 2012. Total debt, at the end of fiscal 2013, was $46.2 million, flat with the figure reported at the end of fiscal 2012.

Other Stocks to Consider

ADTRAN currently has a Zacks Rank #3 (Hold). Other better-ranked stocks in this industry that warrant a look includes Arris Enterprises Inc. (ARRS - Free Report) , Crown Castle International Corp. (CCI - Free Report) and SBA Communications Corp. (SBAC - Free Report) . While Arris carries a Zacks Rank #1 (Strong Buy), both Crown Castle and SBA Communications have a Zacks Rank #2 (Buy).

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