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Adtran Shows Its Mettle

Despite tough market conditions in North America at the end of 2011, access equipment vendor Adtran Inc. (Nasdaq: ADTN) reported fourth-quarter revenues of US$175.3 million, up 6 percent year-on-year, and earnings per share of $0.48, slightly ahead of Wall Street expectations. The company's profits were down slightly compared with the same period a year ago, though. (See Adtran Q4 Profit Dips.)

For the full year, Adtran reported revenues of $717.2 million and earnings per share of $2.12, again slightly ahead of analyst expectations and significantly better than in 2010, when the vendor generated revenues of $605.7 million and earnings of $1.78.

The company's revenues will be boosted in 2012 by the impending acquisition of Nokia Networks 's broadband access business. (See Adtran to Buy NSN's Broadband Unit.)

The company is holding an earnings conference call Wednesday at 9.30 a.m. CET, when it will provide further details, with analysts and investors particularly keen on hearing about guidance for the current quarter.

Why this matters
The fourth quarter of 2011 was a tough time for vendors as North American carrier capex spending hit a speed-bump, but Adtran held up well.

As MKM Partners analyst Mike Genovese stated in an emailed investor note early Wednesday, "The in-line Adtran results appear solid when viewed in the context of weak 2H11 service provider capex" and negative fourth-quarter warnings from Acme Packet Inc. (Nasdaq: APKT) and Juniper Networks Inc. (NYSE: JNPR). (See Juniper's Q4 Got Even Worse and Acme Packet Revises Forecast.)

The focus now is on the vendor's outlook for the first quarter of 2012, noted Genovese. "The first quarter is typically sequentially flattish for Adtran. Given investor concerns about the carrier spending environment, we expect greater-than-average weight will be given to the company's 1Q12 outlook. We expect that flat to slightly up revenue guidance will be met with relief, while flat to down guidance will further increase company-specific and industry-wide concerns," the analyst wrote.

For more
Adtran is working hard to expand its portfolio with acquisitions and new product developments as well as growing its business outside North America.

— Ray Le Maistre, International Managing Editor, Light Reading

Pete Baldwin 12/5/2012 | 5:45:18 PM
re: Adtran Shows Its Mettle

Adtran said Q1 revenues should be flat vs. Q4, which would be around $175M. That's about what analysts were expecting, so -- no nasty surprises there.


They did take a hit from seeing U.S. Tier 1 spending drop -- it was specifically in the case of optical access gear sold to Tier 1 wireless vendors, one in particular (I would guess AT&T).  But it was small -- optical access sales were $17.3M in Q4, compared with $22.3M the previous quarter and about $20M a year ago. CEO Tom Stanton said he expects things to return to normal quickly for optical.

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