Adtran falls on latest quarterly warning
By Jeffry Bartash, CBS.MarketWatch.com
Last Update: 4:55 PM ET Dec. 14, 2004
E-mail it | Print | Alert | Reprint | RSS
WASHINGTON (CBS.MW) -- Shares of Adtran shrank nearly 17 percent on Tuesday after the maker of high-speed networking equipment warned of lower sales and profits for the second straight quarter.
Free! Sign up here to receive our Internet Daily e-Newsletter!
TRADING CENTER
Get up to $500 in
commission-free trades
INFORMATION FOR ADTN:
Create an alert for ADTN
Add ADTN to my portfolio
More cool charts on ADTN
Discuss ADTN
NEWS FOR ADTN
Highlights of rising and falling U.S. stocks
Telecoms end mixed; Adtran sinks
Adtran falls on latest quarterly warning
More news for ADTN
TRACK THESE TOPICS
My Portfolio Alerts
Company: ADTRAN, Inc. Add
Create
Get Breaking News sent directly to your inbox
Create A Portfolio | Create An Alert
By day end, shares had plunged $3.58 at $18.23. Adtran (ADTN: news, chart, profile) stock traded as high as $38 within the past year.
Late Monday, the Huntsville, Ala.-based vendor said that fourth-quarter revenue would end up between $100 million and $104 million, with earnings per share of 16 cents to 18 cents.
Chief Executive Mark Smith said he believes the "pause will be short lived."
Analysts had been expecting profit of 25 cents a share on sales of $119 million, according to Thomson First Call.
Adtran, one of the industry success stories in recent years, is well regarded on Wall Street for its sound management and healthy business. Yet at least two brokerages, Janney Montgomery and WR Hambrecht, immediately cut the stock to "hold" from "buy."
WR Hambrecht also slashed its price target for the stock to $16 from $45.
Adtran supplies products that enable phone companies to deliver DSL high-speed Internet service. The company offers a lineup of nearly 500 products to big phone carriers and to large corporations.
In October, Smith suggested that some customers were delaying purchases until the company released a new and improved product line. The newer products started to ship in the last week of the third quarter.
Still, several analysts are unsure if the sales difficulties will be resolved soon. They note that big phone companies such as Verizon and SBC Communications are moving to add more fiber to their networks, which might retard sales of DSL-related gear.
"We continue to believe that Adtran is one of the most fundamentally sound and well-managed companies in the communications infrastructure space," Hambrecht analyst Reginal King told clients in a note on Tuesday.
"However, we have grown incrementally more concerned regarding the near-term health of the DSL market in the U.S. ... and Adtran's ability to compete in an increasingly fiber-rich environment." |
