Glimmer Of Hope For ADC Telecommunications (ADCT)

On 31st December 2009 ADC Telecom (NASDAQ: ADCT) had announced that it would be selling its GSM business in Ireland for an undisclosed amount.

Analysts at Auriga believe that this divestiture is a small and positive step towards better profitability. Auriga has maintained ADC Telecommunications at Hold with a price target of $6. The GSM business was a part of ADC's Network Solutions division, which used to contribute 8% of total revenues, but lost close to $40 million last year. Scope for cost cutting has come down and this reinforces the Hold rating.