So this is how you repay me, ADC Telecommunications
Actually, this one shouldn't be thought of as such a huge surprise. First, as I indicated in my earlier piece, turnarounds like ADC often have twists, turns, bumps, and lumps as they try to climb their way back to respectability. What's more, when the company last reported earnings, the management indicated that it looked as though customers had been accelerating their spending into the first half of the year, likely to the detriment of the second half.
Well, it looks like they were more right than they knew. Due to lower-than-expected sales of fiber-to-the-x (FTTX) infrastructure equipment, the company is going to miss its earlier projections. Instead of the average analyst estimates of $321 million in revenue and $0.28 per share in earnings, the company is looking at a range of $290 million to $300 million in revenue and earnings per share of $0.15 to $0.19. Management also mentioned that they were seeing lower sales of amplifiers and services for wireless companies during the quarter.
It seems that the big culprit in the quarter was Verizon
In the meantime, ADC is still in a tricky spot. Some analysts have been calling for a recovery in communications equipment for some time now, and a lot of stocks have traded up in anticipation. Although some companies, including satellite players Radyne
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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).