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ADTRAN (ADTN) Misses Earnings & Revenue Estimates in Q3

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ADTRAN, Inc. (ADTN - Free Report) reported unimpressive third-quarter 2021 results, wherein both the bottom and the top lines missed the Zacks Consensus Estimate.

Net Loss

On a GAAP basis, net loss in the September quarter was $10.4 million or a loss of 21 cents per share against a net income of $5.5 million or 11 cents per share in the prior-year quarter. The deterioration was due to an operating loss, net investment loss, and higher income tax.

Non-GAAP net loss was $0.8 million or a loss of 2 cents per share against a net income of $7.9 million or 16 cents per share in the year-ago quarter. The bottom line missed the Zacks Consensus Estimate of earnings of 10 cents.

ADTRAN, Inc. Price, Consensus and EPS Surprise ADTRAN, Inc. Price, Consensus and EPS Surprise

ADTRAN, Inc. price-consensus-eps-surprise-chart | ADTRAN, Inc. Quote

Revenues

Quarterly total revenues grew to $138.1 million from $133.1 million in the prior-year quarter, driven by the increasing demand for ADTRAN’s network solutions. The top line, however, missed the consensus estimate of $144 million.

The company is experiencing solid demand, underscored by its record-setting bookings in the quarter, which is up 43% year over year. It continues to add customers, including three new Tier 1 operators since the beginning of the third quarter. ADTRAN also witnessed a 61% year-over-year growth rate in customers deploying its Software-as-a-Service applications.

Revenues from Network Solutions were $120.8 million compared with $115.2 million in the year-ago quarter. ADTRAN’s end-to-end solutions simplify the deployment of fiber-based broadband services and provide a better customer experience. Services and Support revenues were $17.3 million, down from $17.9 million.

Other Details

The total cost of sales increased from $74.2 million to $90.4 million. Gross profit came in at $47.7 million compared with $59 million in the prior-year quarter. Operating loss in the quarter was $10.1 million against an operating income of $4.5 million in the year-ago quarter.

ADTRAN announced that its board of directors approved a cash dividend of 9 cents per share for the third quarter of 2021. The amount is payable on Nov 30 to shareholders on record as of Nov 16.

Cash Flow & Liquidity

During the first nine months of 2021, ADTRAN generated $28.9 million of cash from operating activities against cash utilization of $5.3 million in the prior-year period.

As of Sep 30, 2021, the company had $75.5 million in cash and cash equivalents with $28.3 million of deferred compensation liability.

Zacks Rank & Stocks to Consider

ADTRAN currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader industry are Ooma, Inc. (OOMA - Free Report) , Nokia Corp. (NOK - Free Report) , and SeaChange International, Inc. (SEAC - Free Report) . While Ooma sports a Zacks Rank #1 (Strong Buy), Nokia and SeaChange carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Ooma delivered a trailing four-quarter earnings surprise of 55.2%, on average.

Nokia pulled off a trailing four-quarter earnings surprise of 209.4%, on average.

SeaChange delivered a trailing four-quarter earnings surprise of 28.9%, on average.

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