ADTRAN INC. (ADTN) 27 3/3 +3/8. Investors are being pulled in both directions today as the company reports that a unit of Bell Atlantic
(BEL 71 1/8 +1) has selected company to supply its digital products, but at the same time, stock receives a downgrade from SoundView
Financial. According to the press released by Adtran, BEL has chosen ADTN as a key supplier of High-bit rate Digital Subscriber Line
products (HDSL). The HDSL product is designed to enhance the existing telecommunication infrastructure by transforming copper wires into
high-speed digital transmission media comparable to that of fiber optics, but in a more cost effective manner. The news initially prompted the
stock to trade by more than 1 1/2 point higher, but has come off its intra-day high following the downgrade from SoundView. The firm cuts its
rating to a "hold" from a "buy," although it left its fiscal 1997 and 1998 EPS estimates unchanged. The firm made the decision to cut its view
on the stock because it sees the fundamentals for the company deteriorating as ISDN growth in the US is starting to slow. Thus, the firm
raised the yellow flag on the stock, but it left its EPS outlook for 1997 and 1998 unchanged at $0.86 and $1.13 a share, respectively.
Accordingly, the stock has tried to look pass the ratings downgrade this morning, but only managed to post small gains in the process,
although issue currently trades 61% below its 52-week high reached last year. |
