ADTRAN (NASDAQ:ADTN – Get Free Report) posted its quarterly earnings results on Tuesday. The communications equipment provider reported $0.09 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.03 by $0.06, reports. The business had revenue of $281.17 million during the quarter, compared to the consensus estimate of $285.69 million. ADTRAN had a negative net margin of 2.29% and a positive return on equity of 14.24%. ADTRAN’s revenue was up .6% compared to the same quarter last year. During the same quarter last year, the firm posted $0.05 EPS.
Here are the key takeaways from ADTRAN’s conference call:
- Optical and hyperscaler growth remained strong: Optical revenue rose 11% year over year and 4% sequentially, while hyperscaler revenue increased more than 200% year over year, reaching roughly 10% of total revenue.
- Several future growth catalysts are advancing: ADTRAN expects stronger BEAD-related demand, continued European high-risk vendor replacement, LiteWave 800 customer trials in the first half of 2027, and MicroMux Quattro production around the start of 2027.
- Supply constraints materially limited shipments: Management estimated it could have shipped tens of millions of dollars more in the quarter, with optics, lasers, semiconductors, memory, and increasingly PC boards affected by shortages and rising costs.
- Underlying gross-margin pressure remains significant: Third-quarter non-GAAP gross margin benefited by about 200 basis points from tariff refunds, while normalized margins were approximately 40%, with 80%–90% of the pressure attributed to higher supply costs and some product mix headwinds.
- Near-term profitability and cash flow remain pressured: Fourth-quarter guidance calls for revenue of $272 million to $292 million and a non-GAAP operating margin of only 1% to 5%; third-quarter operating cash flow was negative $24.5 million and free cash flow was negative $39.4 million.
ADTRAN Trading Down 14.9%
ADTN traded down $0.94 during trading on Tuesday, hitting $5.34. 1,578,307 shares of the stock traded hands, compared to its average volume of 1,968,315. The firm has a market capitalization of $435.52 million, a P/E ratio of -19.09, a price-to-earnings-growth ratio of 4.26 and a beta of 1.48. The company has a debt-to-equity ratio of 1.69, a current ratio of 1.79 and a quick ratio of 1.19. The firm has a 50-day moving average of $7.10 and a 200 day moving average of $11.02. ADTRAN has a 12-month low of $5.03 and a 12-month high of $19.98.
Wall Street Analysts Forecast Growth
ADTN has been the subject of several recent research reports. Northland Securities set a $15.00 price target on ADTRAN in a report on Wednesday, August 5th. Wall Street Zen lowered ADTRAN from a “buy” rating to a “hold” rating in a research note on Saturday, August 8th. Craig Hallum set a $12.00 price target on shares of ADTRAN in a research note on Wednesday, August 5th. Needham & Company LLC decreased their target price on shares of ADTRAN from $18.00 to $14.00 and set a “buy” rating on the stock in a report on Thursday, July 23rd. Finally, Rosenblatt Securities lowered their price objective on shares of ADTRAN from $20.00 to $15.00 and set a “buy” rating on the stock in a research report on Wednesday, August 5th. Four analysts have rated the stock with a Buy rating, two have issued a Hold rating and one has given a Sell rating to the company. According to MarketBeat, the stock presently has an average rating of “Hold” and a consensus target price of $14.67.
ADTRAN Company Profile
ADTRAN Holdings, Inc (NASDAQ: ADTN) is a global telecommunications equipment and networking company that provides communications infrastructure for service providers, enterprises and other organizations. The company develops solutions that help network operators deliver broadband, voice, data and cloud-connected services over fiber, copper, wireless and other access technologies.
Its portfolio includes fiber access systems, passive optical networking equipment, broadband access platforms, Ethernet and data networking products, routers, switches, Wi-Fi solutions, fixed wireless access equipment and software for network management and automation.
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