Adtran doubles profit on strong sales
By Jeffry Bartash, CBS.MarketWatch.com
Last Update: 5:39 PM ET July 15, 2003
WASHINGTON (CBS.MW) - Adtran on Tuesday said its second-quarter profit doubled amid rising demand for products that let phone companies deliver high-speed Internet access over copper lines.
In light of its strong results, Huntsville, Ala.-based Adtran declared a special dividend of $2 a share. It also declared a regular dividend of 15 cents a share.
In the latest quarter, the company said it earned $12.38 million, or 31 cents a share, compared with pro forma, or adjusted earnings, of $6.08 million, or 16 cents, a year earlier.
Adtran (ADTN: news, chart, profile) easily beat the 27-cent consensus estimate of Thomson First Call.
Adtran's revenue rose for the third straight quarter on a sequential basis, to $90.44 million from $85.78 million. That was more than expected.
Adtran offers a lineup of nearly 500 products to big carriers such as SBC Communications as well as to large corporations. It's one of the few telecom equipment makers to see improved results in recent months, the result of higher purchases by phone companies seeking to sign up more customers for DSL, or high-speed access.
Flush with cash, Adtran said it's decided to return more money to shareholders.
"Our company's strong operating model has generated cash over the years well in excess of its needs and with recent legislation cash dividends are now a tax efficient way to release value to shareholders," Chief Executive Mark Smith said in a statement.
The special and quarterly dividends are payable Aug. 29 to shareholders of record on July 31.
The stock closed Monday at $58.52, a level it hasn't seen since fall 2000. Yet because of its recent runup, few analysts have been recommending that investors buy more stock.
Indeed, on Tuesday, the stock quickly sank after an early runup, as investors took profits. Shares dived $6.26, or 10.6 percent, to $52.29.
Adtran could also be affected soon by new federal rules on local phone networks. The FCC voted 3-2 in February to phase out "line-sharing" within three years and to let the Baby Bells raise prices.
Under current rules, the Bells have to let rivals use their local networks at sharp discounts. They also have to let rivals "share" portions of their local phone lines to deliver high-speed Internet service.
The FCC is slated to issue its final rules within days. A ruling more favorable to rivals of the Bells could mean more business for Adtran down the line.
On an unadjusted basis, Adtran posted earnings of $4.97 million, or 13 cents, a year earlier. Last year's quarterly included a onetime charge related to a markdown in the value of certain investments.
Adtran doubles profit on strong sales
By Jeffry Bartash, CBS.MarketWatch.com
Last Update: 5:39 PM ET July 15, 2003
WASHINGTON (CBS.MW) - Adtran on Tuesday said its second-quarter profit doubled amid rising demand for products that let phone companies deliver high-speed Internet access over copper lines.
In light of its strong results, Huntsville, Ala.-based Adtran declared a special dividend of $2 a share. It also declared a regular dividend of 15 cents a share.
In the latest quarter, the company said it earned $12.38 million, or 31 cents a share, compared with pro forma, or adjusted earnings, of $6.08 million, or 16 cents, a year earlier.
Adtran (ADTN: news, chart, profile) easily beat the 27-cent consensus estimate of Thomson First Call.
Adtran's revenue rose for the third straight quarter on a sequential basis, to $90.44 million from $85.78 million. That was more than expected.
Adtran offers a lineup of nearly 500 products to big carriers such as SBC Communications as well as to large corporations. It's one of the few telecom equipment makers to see improved results in recent months, the result of higher purchases by phone companies seeking to sign up more customers for DSL, or high-speed access.
Flush with cash, Adtran said it's decided to return more money to shareholders.
"Our company's strong operating model has generated cash over the years well in excess of its needs and with recent legislation cash dividends are now a tax efficient way to release value to shareholders," Chief Executive Mark Smith said in a statement.
The special and quarterly dividends are payable Aug. 29 to shareholders of record on July 31.
The stock closed Monday at $58.52, a level it hasn't seen since fall 2000. Yet because of its recent runup, few analysts have been recommending that investors buy more stock.
Indeed, on Tuesday, the stock quickly sank after an early runup, as investors took profits. Shares dived $6.26, or 10.6 percent, to $52.29.
Adtran could also be affected soon by new federal rules on local phone networks. The FCC voted 3-2 in February to phase out "line-sharing" within three years and to let the Baby Bells raise prices.
Under current rules, the Bells have to let rivals use their local networks at sharp discounts. They also have to let rivals "share" portions of their local phone lines to deliver high-speed Internet service.
The FCC is slated to issue its final rules within days. A ruling more favorable to rivals of the Bells could mean more business for Adtran down the line.
On an unadjusted basis, Adtran posted earnings of $4.97 million, or 13 cents, a year earlier. Last year's quarterly included a onetime charge related to a markdown in the value of certain investments. |
