The 10-second takeaway
For the quarter ended June 30 (Q2), ADTRAN beat expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue dropped. Non-GAAP earnings per share dropped significantly. GAAP earnings per share dropped significantly.
Margins dropped across the board.
ADTRAN chalked up revenue of $162.2 million. The 12 analysts polled by S&P Capital IQ expected to see revenue of $154.1 million on the same basis. GAAP reported sales were 12% lower than the prior-year quarter's $184.0 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.21. The nine earnings estimates compiled by S&P Capital IQ anticipated $0.19 per share. Non-GAAP EPS of $0.21 for Q2 were 45% lower than the prior-year quarter's $0.38 per share. GAAP EPS of $0.17 for Q2 were 48% lower than the prior-year quarter's $0.33 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 49.2%, 250 basis points worse than the prior-year quarter. Operating margin was 8.7%, 590 basis points worse than the prior-year quarter. Net margin was 6.1%, 540 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $163.0 million. On the bottom line, the average EPS estimate is $0.22.
Next year's average estimate for revenue is $621.4 million. The average EPS estimate is $0.78.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 157 members out of 185 rating the stock outperform, and 28 members rating it underperform. Among 52 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 42 give ADTRAN a green thumbs-up, and 10 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on ADTRAN is underperform, with an average price target of $19.78.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.