ADTRAN (NASDAQ:ADTN) Issues Quarterly Earnings Results, Beats Estimates By $0.06 EPS

ADTRAN (NASDAQ:ADTN) announced its quarterly earnings data on Tuesday. The communications equipment provider reported $0.09 EPS for the quarter, beating analysts’ consensus estimates of $0.03 by $0.06, reports. ADTRAN had a negative net margin of 2.29% and a positive return on equity of 14.24%. The firm had revenue of $281.17 million during the quarter, compared to the consensus estimate of $285.69 million. During the same quarter last year, the firm earned $0.05 earnings per share. The firm’s revenue was up .6% compared to the same quarter last year.

Here are the key takeaways from ADTRAN’s conference call:

• Optical and hyperscaler growth remained strong: Optical revenue rose 11% year over year and 4% sequentially, while hyperscaler revenue increased more than 200% year over year, reaching roughly 10% of total revenue.
• Several future growth catalysts are advancing: ADTRAN expects stronger BEAD-related demand, continued European high-risk vendor replacement, LiteWave 800 customer trials in the first half of 2027, and MicroMux Quattro production around the start of 2027.
• Supply constraints materially limited shipments: Management estimated it could have shipped tens of millions of dollars more in the quarter, with optics, lasers, semiconductors, memory, and increasingly PC boards affected by shortages and rising costs.
• Underlying gross-margin pressure remains significant: Third-quarter non-GAAP gross margin benefited by about 200 basis points from tariff refunds, while normalized margins were approximately 40%, with 80%–90% of the pressure attributed to higher supply costs and some product mix headwinds.
• Near-term profitability and cash flow remain pressured: Fourth-quarter guidance calls for revenue of $272 million to $292 million and a non-GAAP operating margin of only 1% to 5%; third-quarter operating cash flow was negative $24.5 million and free cash flow was negative $39.4 million.

ADTRAN Stock Performance

ADTRAN stock traded down $0.86 during mid-day trading on Tuesday, hitting $5.42. 1,504,810 shares of the company’s stock traded hands, compared to its average volume of 1,967,839. The company has a market cap of $441.30 million, a PE ratio of -19.48, a price-to-earnings-growth ratio of 4.26 and a beta of 1.48. The company has a quick ratio of 1.19, a current ratio of 1.79 and a debt-to-equity ratio of 1.69. ADTRAN has a one year low of $5.03 and a one year high of $19.98. The firm has a 50 day moving average price of $7.10 and a 200 day moving average price of $11.02.

Analyst Ratings Changes

A number of equities analysts have recently weighed in on the company. Wall Street Zen cut ADTRAN from a “buy” rating to a “hold” rating in a report on Saturday, August 8th. Rosenblatt Securities decreased their price objective on ADTRAN from $20.00 to $15.00 and set a “buy” rating on the stock in a research note on Wednesday, August 5th. Zacks Research upgraded ADTRAN from a “strong sell” rating to a “hold” rating in a research note on Monday, October 5th. Craig Hallum set a $12.00 target price on ADTRAN in a research report on Wednesday, August 5th. Finally, Needham & Company LLC lowered their price target on ADTRAN from $18.00 to $14.00 and set a “buy” rating for the company in a report on Thursday, July 23rd. Four analysts have rated the stock with a Buy rating, two have given a Hold rating and one has assigned a Sell rating to the company. Based on data from MarketBeat.com, the company presently has a consensus rating of “Hold” and an average target price of $14.67.

About ADTRAN

ADTRAN Holdings, Inc (NASDAQ: ADTN) is a global telecommunications equipment and networking company that provides communications infrastructure for service providers, enterprises and other organizations. The company develops solutions that help network operators deliver broadband, voice, data and cloud-connected services over fiber, copper, wireless and other access technologies.

Its portfolio includes fiber access systems, passive optical networking equipment, broadband access platforms, Ethernet and data networking products, routers, switches, Wi-Fi solutions, fixed wireless access equipment and software for network management and automation.