Broadband equipment maker Adtran is set to have a much better year than in 2015, when its revenues shrank, thanks to a pick-up in spending among service provider and enterprise customers, according to Michael Genovese, an analyst at MKM Partners.
Adtran Inc. (Nasdaq: ADTN) is expected to report a year-on-year revenue decline of about 5% for 2015 due partly to a lack of new service provider contracts and the weak Euro, but the situation will improve markedly this year, predicts Genovese.
New opportunities include projects with ten US service providers set to receive nearly $9 billion in support over the next six years from the federal government's Connect America Fund, according to MKM Partners.
"We believe deploying vectored xDSL is a top strategic priority for CenturyLink in 2016," says Genovese in a research note. "Further, we think Adtran is fairly far along in lab and field trials … We estimate vectoring at CenturyLink could be a $100 million plus opportunity for Adtran over two to three years."
MKM Partners has raised its forecasts for Adtran and now expects the company to make $138 million in revenues for the fourth quarter of 2015 -- up from a previous forecast of $136 million -- and $630 million in 2016, compared with an earlier forecast of $619 million.
Genovese thinks Adtran will report full-year revenues of $598.5 million for 2015.
— Iain Morris, , News Editor, Light Reading