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ADTRAN (ADTN) Q1 Earnings Beat Estimates, Revenues Down Y/Y
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ADTRAN Holdings, Inc. (ADTN - Free Report) reported first-quarter 2024 results, wherein both the bottom line and the top line beat the respective Zacks Consensus Estimate. The expansion of the Mosaic One platform reportedly boosted its customer base. On a year-over-year basis, revenues contracted due to soft macroeconomic trends.
Net Income
On a GAAP basis, net loss in the March quarter was $324.6 million or a loss of $4.12 per share compared with net loss of $40 million or a loss of 51 cents per share in the prior-year quarter. The year-over-year wider loss was primarily due to revenue contraction and increasing operating expenses.
Non-GAAP net loss was $1.7 million or a loss of 2 cents per share compared with a net loss of $10.6 million or a loss of 14 cents per share a year ago. The loss was narrower than the Zacks Consensus Estimate of a loss of 8 cents.
ADTRAN Holdings, Inc. Price, Consensus and EPS Surprise
Quarterly total revenues dropped to $226.1 million from $324 million in the prior-year quarter, owing to soft demand trends across the network solutions business. The top line beat the consensus estimate of $223 million.
Network Solutions contributed $181.3 million in revenues compared with $282.4 million in the prior-year quarter. Services and Support revenues were $44.9 million, up from $41.5 million a year ago.
Other Details
Non-GAAP gross margin in the reported quarter was 41.6% compared with 37.3% in the prior-year quarter, indicating growth of 429 basis points year over year. Operating margin in the first quarter was negative 3.9%, which was within the company’s guidance of (7)%-0% for net sales. Seasonal variations and unfavorable currency rate development adversely impacted the operating margin in the quarter under discussion.
Total cost of sales decreased from $236.1 million to $153.9 million. GAAP gross profit came in at $72.2 million compared with $87.8 million in the prior-year quarter. Operating loss in the quarter was $339.6 million compared with an operating loss of $49.7 million in the year-ago quarter.
Cash Flow & Liquidity
In the first three months of 2024, ADTRAN generated $36.6 million of cash from operating activities against a cash utilization of $19.9 million in the prior-year period. As of Mar 31, 2024, the company had $106.7 million in cash and cash equivalents with $29.7 million of deferred compensation liability compared with $87.1 million and $29 million, respectively, in the prior-year period.
Arista Networks, Inc. (ANET - Free Report) is slated to announce first-quarter 2024 results on May 7, after the market close. The stock, carrying a Zacks Rank #2(Buy) at present, is likely to benefit from 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 17.5% and delivered an earnings surprise of 13.3%, on average, in the trailing four quarters.
Airgain, Inc. (AIRG - Free Report) is slated to report first-quarter 2024 results on May 8, after the closing bell. It has a long-term earnings growth expectation of 35%.
Headquartered in San Diego, CA, Airgain offers integrated wireless solutions in the form of antenna products. These products are equipped to solve critical connectivity needs in both the design process and the operating environment across the enterprise, automotive and consumer markets. Ideal for original equipment and design manufacturers, vertical markets, chipset vendors, service providers, value-added resellers and software developers worldwide, the customizable antennas from Airgain serve both indoor and outdoor connectivity issues.
Turtle Beach Corporation (HEAR - Free Report) is slated to report first-quarter 2024 results on May 7, after the closing bell. It develops and markets gaming headset solutions for various platforms, including video game and entertainment consoles, handheld consoles, personal computers, tablets and mobile devices under the Turtle Beach brand. It has a Zacks Rank #2.
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ADTRAN (ADTN) Q1 Earnings Beat Estimates, Revenues Down Y/Y
ADTRAN Holdings, Inc. (ADTN - Free Report) reported first-quarter 2024 results, wherein both the bottom line and the top line beat the respective Zacks Consensus Estimate. The expansion of the Mosaic One platform reportedly boosted its customer base. On a year-over-year basis, revenues contracted due to soft macroeconomic trends.
Net Income
On a GAAP basis, net loss in the March quarter was $324.6 million or a loss of $4.12 per share compared with net loss of $40 million or a loss of 51 cents per share in the prior-year quarter. The year-over-year wider loss was primarily due to revenue contraction and increasing operating expenses.
Non-GAAP net loss was $1.7 million or a loss of 2 cents per share compared with a net loss of $10.6 million or a loss of 14 cents per share a year ago. The loss was narrower than the Zacks Consensus Estimate of a loss of 8 cents.
ADTRAN Holdings, Inc. Price, Consensus and EPS Surprise
ADTRAN Holdings, Inc. price-consensus-eps-surprise-chart | ADTRAN Holdings, Inc. Quote
Revenues
Quarterly total revenues dropped to $226.1 million from $324 million in the prior-year quarter, owing to soft demand trends across the network solutions business. The top line beat the consensus estimate of $223 million.
Network Solutions contributed $181.3 million in revenues compared with $282.4 million in the prior-year quarter. Services and Support revenues were $44.9 million, up from $41.5 million a year ago.
Other Details
Non-GAAP gross margin in the reported quarter was 41.6% compared with 37.3% in the prior-year quarter, indicating growth of 429 basis points year over year. Operating margin in the first quarter was negative 3.9%, which was within the company’s guidance of (7)%-0% for net sales. Seasonal variations and unfavorable currency rate development adversely impacted the operating margin in the quarter under discussion.
Total cost of sales decreased from $236.1 million to $153.9 million. GAAP gross profit came in at $72.2 million compared with $87.8 million in the prior-year quarter. Operating loss in the quarter was $339.6 million compared with an operating loss of $49.7 million in the year-ago quarter.
Cash Flow & Liquidity
In the first three months of 2024, ADTRAN generated $36.6 million of cash from operating activities against a cash utilization of $19.9 million in the prior-year period. As of Mar 31, 2024, the company had $106.7 million in cash and cash equivalents with $29.7 million of deferred compensation liability compared with $87.1 million and $29 million, respectively, in the prior-year period.
Zacks Rank
ADTRAN currently has a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Upcoming Releases
Arista Networks, Inc. (ANET - Free Report) is slated to announce first-quarter 2024 results on May 7, after the market close. The stock, carrying a Zacks Rank #2(Buy) at present, is likely to benefit from 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 17.5% and delivered an earnings surprise of 13.3%, on average, in the trailing four quarters.
Airgain, Inc. (AIRG - Free Report) is slated to report first-quarter 2024 results on May 8, after the closing bell. It has a long-term earnings growth expectation of 35%.
Headquartered in San Diego, CA, Airgain offers integrated wireless solutions in the form of antenna products. These products are equipped to solve critical connectivity needs in both the design process and the operating environment across the enterprise, automotive and consumer markets. Ideal for original equipment and design manufacturers, vertical markets, chipset vendors, service providers, value-added resellers and software developers worldwide, the customizable antennas from Airgain serve both indoor and outdoor connectivity issues.
Turtle Beach Corporation (HEAR - Free Report) is slated to report first-quarter 2024 results on May 7, after the closing bell. It develops and markets gaming headset solutions for various platforms, including video game and entertainment consoles, handheld consoles, personal computers, tablets and mobile devices under the Turtle Beach brand. It has a Zacks Rank #2.