|
ADTRAN, INC. (ADTN) 23 7/16. Another telecommunications equipment supplier is warning. After the close Friday, Adtran (ADTN) said that revenues and earnings would come in below Wall Street expectations for the fourth quarter. This follows Pairgain's similar warning on Thursday. ADTN CEO Smith said "most major telephone companies have reduced their purchasing activity," but suggested that this might be related to some delays of orders prior to year-end that might boost sales in the first quarter. This may be true, however, there were already indications that ADTN revenues might have been slowing. After posting over 13% year/year growth in the first half of this year, revenue growth slowed to 9% in the third quarter. Now, it looks like the fourth quarter could come in below that. Profits have held up nicely, however, and if profits had come in at the (pre-warning) forecast of $0.32, ADTN would have posted earnings this year of $1.12, up from $1.02 last year. Profits had been plugging along at a steady, if not spectacular clip. ADTN stock had been a high flyer in 1995 and 1996 as this whole industry was hot, but has headed lower since then. The stock hit a 52-week high of 37 3/4 in late 1997, and was at about 28 to start this year, and has drifted down since. ADTN has little momentum and today's announcement won't help. Given that PAIR said their revenue would be "significantly" below expectations, and ADTN is now warning, investors might be cautious about the telecommunications equipment sector, and consider it too early to even start bottom fishing. From Briefing.com |
