ADTRAN Posts 0.6% Revenue Growth, Sets Near-Flat Q4 Outlook

ADTRAN Holdings Inc. posted 0.6% year-over-year revenue growth in the third quarter, but sales missed its prior guidance midpoint and analyst forecasts as non-GAAP earnings per share beat expectations.

Revenue for the quarter ended Sept. 30 was $281.167 million, up from $279.435 million in the same quarter last year. That placed sales about $3.8 million below the $285 million midpoint of ADTRAN’s previous $275 million to $295 million forecast. Revenue also came in below analyst expectations.

On a GAAP basis, diluted loss per share was 10 cents, compared with a 12-cent loss a year earlier. Non-GAAP diluted earnings reached 9 cents per share, up from 5 cents in the year-earlier quarter and above analyst estimates. The two per-share results use separate accounting measures for the same period.

Tom Stanton, ADTRAN Holdings’ chairman and CEO, described revenue as “slightly below the midpoint of our guidance range.”

Adtran Inc., a networking and communications supplier to service providers and other customers, is a subsidiary of ADTRAN Holdings. The company cited seasonality, supply availability and the timing of large customer projects as factors in its next-quarter outlook.

For the fourth quarter, ADTRAN expects revenue of $272 million to $292 million and a non-GAAP operating margin of 1% to 5%. The revenue midpoint of $282 million is about 0.3% above third-quarter sales, keeping the center of the forecast close to the latest quarter’s result.

ADTRAN’s third-quarter non-GAAP operating margin was 5%, while its GAAP operating margin was negative 0.3%. ADTRAN’s third-quarter non-GAAP gross margin was 42.1%; IEEPA refunds added roughly two percentage points. The fourth-quarter margin forecast is non-GAAP; the company did not provide a GAAP forecast because it could not predict certain adjustments without unreasonable effort.