ADTRAN Beats on Q1 Earnings, Lags Revs - Analyst Blog

Communication network solution provider, ADTRAN Inc. ADTN, reported mixed first-quarter 2014 financial results. While net income surpassed the Zacks Consensus Estimate, total revenue fell below the same. Sluggish sales in the U.S. were well mitigated by strong revenue growth in the international market.

The company reported quarterly total revenue of $147 million, up 2.8% year over year, but slightly below the Zacks Consensus Estimate of $150 million. In the first quarter of 2014, GAAP net income was $9.6 million or 17 cents per share compared with $7.9 million or 13 cents per share in the year-ago quarter. However, quarterly adjusted earnings per share of 18 cents beat the Zacks Consensus Estimate of 16 cents per share.

Quarterly gross margin stood at 52.9% compared with 48.7% in the prior-year quarter. However, operating income registered a steep rise of 71.2% year over year to $11.3 million. Quarterly operating margin was 7.7% against 4.6% in the prior-year quarter. The company's board of directors declared a cash dividend of 9 cents per share for the quarter. The dividend will be paid on May 15 to shareholders of record as of May 1.

At the end of the first quarter of fiscal 2014, ADTRAN generated $9.9 million of cash from operations compared with $26.2 million in first-quarter 2013. Free cash flow, in the same period, was $7.9 million compared with $25.6 million in the year-ago period. The company exited the first quarter of fiscal 2014 with cash and marketable securities of $142 million compared with $164.1 million at the end of fiscal 2013. Total debt, at the end of the reported quarter, stood at $30 million as against $46.2 million at the end of fiscal 2013.

Other Stocks to Consider

ADTRAN currently has a Zacks Rank #2 (Buy). Other well-performing stocks in this industry that warrant a look include CommScope Holding Company, Inc. COMM, Crown Castle International Corp. CCI and AT&T, Inc. T. All three have the same Zacks Rank as ADTRAN.