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ADTRAN (ADTN) Preliminary Q1 Revenues Lower Than Expected
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ADTRAN Holdings, Inc. (ADTN - Free Report) announced certain preliminary results for first-quarter 2023 before it officially declares the full results on May 8. The lower-than-expected preliminary figures appear to disappoint investors as the share price fell drastically in pre-market trading post the press release.
Lower Revenues
First-quarter 2023 revenues are likely to be in the range of $322 million to $326 million, significantly down from prior expectations of $355-$375 million. The lower-than-expected top-line figure is primarily attributable to higher customer inventory levels that negatively impacted its Subscriber Solutions product line. Moreover, supply chain woes prevented the company from fulfilling customer demand across all categories, translating into lower revenues.
Other Preliminary Metrics
Total GAAP operating margin is expected to be between -14% and -17% compared with earlier expectations of -1% and -2.5%.
Moving Forward
Although ADTRAN expects the inventory impact to be transitionary, it intends to reduce operating expenses to improve profitability. The company expects to witness healthy long-term growth opportunities as carriers increasingly tend to upgrade their network infrastructure to fiber optics.
ADTRAN expects solid traction in domestic markets for ultra-broadband and Fiber-To-The-Home solutions, along with SD access and EPON solutions. Its products and services provide solutions supporting fiber- and copper-based infrastructures and a growing number of wireless and coax-based solutions, lowering the overall cost of deploying advanced services across a wide range of applications.
Zacks Rank & Stocks to Consider
ADTRAN currently has a Zacks Rank #5 (Strong Sell).
Arista Networks, Inc. (ANET - Free Report) , sporting a Zacks Rank #1, is likely to benefit from the strong momentum and diversification across its top verticals and product lines. The company has a software-driven, data-centric approach to help customers build their cloud architecture and enhance their cloud experience. Arista has a long-term earnings growth expectation of 14.2% and delivered an earnings surprise of 14.2%, on average, in the trailing four quarters.
It holds a leadership position in 100-gigabit Ethernet switching share in port for the high-speed datacenter segment. Arista is increasingly gaining market traction in 200- and 400-gig high-performance switching products and remains well-positioned for healthy growth in data-driven cloud networking business with proactive platforms and predictive operations.
Juniper Networks, Inc. (JNPR - Free Report) carries a Zacks Rank #2 (Buy). It has a long-term earnings growth expectation of 7% and delivered an earnings surprise of 1.6%, on average, in the trailing four quarters.
Juniper is leveraging the 400-gig cycle to capture hyperscale switching opportunities inside the data center. The company is set to capitalize on the increasing demand for data center virtualization, cloud computing and mobile traffic packet/optical convergence.
Splunk Inc. , sporting a Zacks Rank #1, is another key pick. San Francisco, CA-based Splunk provides software solutions that enable enterprises to gain real-time operational intelligence by harnessing the value of their data. The company’s offerings enable users to investigate, monitor, analyze and act on machine data and big data, irrespective of format or source, and helps in operational decision making.
Splunk’s software offerings enable users to have deep insight of their data on a real-time basis, thereby making the operational decision-making process faster. It delivered a trailing four-quarter earnings surprise of 131.1%, on average. Splunk has a long-term earnings growth expectation of 24.1%.
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ADTRAN (ADTN) Preliminary Q1 Revenues Lower Than Expected
ADTRAN Holdings, Inc. (ADTN - Free Report) announced certain preliminary results for first-quarter 2023 before it officially declares the full results on May 8. The lower-than-expected preliminary figures appear to disappoint investors as the share price fell drastically in pre-market trading post the press release.
Lower Revenues
First-quarter 2023 revenues are likely to be in the range of $322 million to $326 million, significantly down from prior expectations of $355-$375 million. The lower-than-expected top-line figure is primarily attributable to higher customer inventory levels that negatively impacted its Subscriber Solutions product line. Moreover, supply chain woes prevented the company from fulfilling customer demand across all categories, translating into lower revenues.
Other Preliminary Metrics
Total GAAP operating margin is expected to be between -14% and -17% compared with earlier expectations of -1% and -2.5%.
Moving Forward
Although ADTRAN expects the inventory impact to be transitionary, it intends to reduce operating expenses to improve profitability. The company expects to witness healthy long-term growth opportunities as carriers increasingly tend to upgrade their network infrastructure to fiber optics.
ADTRAN expects solid traction in domestic markets for ultra-broadband and Fiber-To-The-Home solutions, along with SD access and EPON solutions. Its products and services provide solutions supporting fiber- and copper-based infrastructures and a growing number of wireless and coax-based solutions, lowering the overall cost of deploying advanced services across a wide range of applications.
Zacks Rank & Stocks to Consider
ADTRAN currently has a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Arista Networks, Inc. (ANET - Free Report) , sporting a Zacks Rank #1, is likely to benefit from the strong momentum and diversification across its top verticals and product lines. The company has a software-driven, data-centric approach to help customers build their cloud architecture and enhance their cloud experience. Arista has a long-term earnings growth expectation of 14.2% and delivered an earnings surprise of 14.2%, on average, in the trailing four quarters.
It holds a leadership position in 100-gigabit Ethernet switching share in port for the high-speed datacenter segment. Arista is increasingly gaining market traction in 200- and 400-gig high-performance switching products and remains well-positioned for healthy growth in data-driven cloud networking business with proactive platforms and predictive operations.
Juniper Networks, Inc. (JNPR - Free Report) carries a Zacks Rank #2 (Buy). It has a long-term earnings growth expectation of 7% and delivered an earnings surprise of 1.6%, on average, in the trailing four quarters.
Juniper is leveraging the 400-gig cycle to capture hyperscale switching opportunities inside the data center. The company is set to capitalize on the increasing demand for data center virtualization, cloud computing and mobile traffic packet/optical convergence.
Splunk Inc. , sporting a Zacks Rank #1, is another key pick. San Francisco, CA-based Splunk provides software solutions that enable enterprises to gain real-time operational intelligence by harnessing the value of their data. The company’s offerings enable users to investigate, monitor, analyze and act on machine data and big data, irrespective of format or source, and helps in operational decision making.
Splunk’s software offerings enable users to have deep insight of their data on a real-time basis, thereby making the operational decision-making process faster. It delivered a trailing four-quarter earnings surprise of 131.1%, on average. Splunk has a long-term earnings growth expectation of 24.1%.