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ADTRAN Holdings (ADTN) Down 12.5% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for ADTRAN Holdings (ADTN - Free Report) . Shares have lost about 12.5% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is ADTRAN Holdings due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
ADTRAN Misses on Q4 Earnings Despite Higher Revenues
ADTRAN reported soft fourth-quarter 2022 results, wherein both the bottom line and top line missed the respective Zacks Consensus Estimate. However, revenues more than doubled on a year-over-year basis.
Net Income
On a GAAP basis, net income in the December quarter was $38.9 million or 49 cents per share against a loss of $4.2 million or a loss of 9 cents per share in the prior-year quarter. The year-over-year improvement despite the higher cost of revenues and operating expenses was primarily due to top-line growth and income tax benefit during the reported quarter. Non-GAAP net income was $9.9 million or 12 cents per share, which missed the Zacks Consensus Estimate of 16 cents.
In 2022, GAAP loss was $2 million or a loss of 3 cents per share compared with a loss of $8.6 million or a loss of 18 cents per share in 2021. Non-GAAP net income in 2022 was $37.2 million or 60 cents per share compared with $18.4 million or 38 cents per share in 2021.
Revenues
Quarterly total revenues more than doubled to $358.3 million from $154.2 million in the prior-year quarter, driven by the increasing demand for ADTRAN’s network solutions and fiber broadband products. The top line missed the consensus estimate of $362 million. In 2022, revenues improved to $1,025.5 million from $563 million in 2021.
Revenues from Network Solutions in the reported quarter were $317.5 million compared with $138.8 million in the year-ago quarter, with incremental contribution from ADVA.ADTRAN completed the buyout of ADVA in July. The company recorded healthy demand trends driven by the accelerated expansion of fiber-to-the-home networks, upgrades to in-home Wi-Fi connectivity and the adoption of cloud-based automation tools. The solid quarterly performance was further buoyed by improved customer diversification and end-to-end fiber broadband solutions. Services and Support revenues were $40.8 million, up from $15.3 million.
Other Details
Total cost of sales increased from $99.7 million to $250.9 million. GAAP gross profit came in at $107.4 million compared with $54.4 million in the prior-year quarter. Operating loss in the quarter was $32.9 million compared with an operating loss of $7.2 million in the year-ago quarter.
Cash Flow & Liquidity
In 2022, ADTRAN used $43.5 million of cash in operating activities against an operating cash flow of $3 million in 2021. As of Dec 31, 2022, the company had $108.6 million in cash and cash equivalents with $26.7 million of deferred compensation liability compared with the respective tallies of $56.6 million and $31.4 million in the prior-year period.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -13.33% due to these changes.
VGM Scores
At this time, ADTRAN Holdings has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Following the exact same course, 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.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. It's no surprise ADTRAN Holdings has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
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ADTRAN Holdings (ADTN) Down 12.5% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for ADTRAN Holdings (ADTN - Free Report) . Shares have lost about 12.5% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is ADTRAN Holdings due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
ADTRAN Misses on Q4 Earnings Despite Higher Revenues
ADTRAN reported soft fourth-quarter 2022 results, wherein both the bottom line and top line missed the respective Zacks Consensus Estimate. However, revenues more than doubled on a year-over-year basis.
Net Income
On a GAAP basis, net income in the December quarter was $38.9 million or 49 cents per share against a loss of $4.2 million or a loss of 9 cents per share in the prior-year quarter. The year-over-year improvement despite the higher cost of revenues and operating expenses was primarily due to top-line growth and income tax benefit during the reported quarter. Non-GAAP net income was $9.9 million or 12 cents per share, which missed the Zacks Consensus Estimate of 16 cents.
In 2022, GAAP loss was $2 million or a loss of 3 cents per share compared with a loss of $8.6 million or a loss of 18 cents per share in 2021. Non-GAAP net income in 2022 was $37.2 million or 60 cents per share compared with $18.4 million or 38 cents per share in 2021.
Revenues
Quarterly total revenues more than doubled to $358.3 million from $154.2 million in the prior-year quarter, driven by the increasing demand for ADTRAN’s network solutions and fiber broadband products. The top line missed the consensus estimate of $362 million. In 2022, revenues improved to $1,025.5 million from $563 million in 2021.
Revenues from Network Solutions in the reported quarter were $317.5 million compared with $138.8 million in the year-ago quarter, with incremental contribution from ADVA.ADTRAN completed the buyout of ADVA in July. The company recorded healthy demand trends driven by the accelerated expansion of fiber-to-the-home networks, upgrades to in-home Wi-Fi connectivity and the adoption of cloud-based automation tools. The solid quarterly performance was further buoyed by improved customer diversification and end-to-end fiber broadband solutions. Services and Support revenues were $40.8 million, up from $15.3 million.
Other Details
Total cost of sales increased from $99.7 million to $250.9 million. GAAP gross profit came in at $107.4 million compared with $54.4 million in the prior-year quarter. Operating loss in the quarter was $32.9 million compared with an operating loss of $7.2 million in the year-ago quarter.
Cash Flow & Liquidity
In 2022, ADTRAN used $43.5 million of cash in operating activities against an operating cash flow of $3 million in 2021. As of Dec 31, 2022, the company had $108.6 million in cash and cash equivalents with $26.7 million of deferred compensation liability compared with the respective tallies of $56.6 million and $31.4 million in the prior-year period.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -13.33% due to these changes.
VGM Scores
At this time, ADTRAN Holdings has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Following the exact same course, 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.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. It's no surprise ADTRAN Holdings has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.