ADTRAN Third Quarter Earnings Sneak Peek

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ADTRAN, Inc. (NASDAQ:ADTN) will unveil its latest earnings on Wednesday, October 10, 2012. Adtran designs, manufactures, markets, and services network access solutions for communications networks.

ADTRAN, Inc. Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average estimate of analysts is for profit of 17 cents per share, a decline of 69.6% from the company’s actual earnings for the same quarter a year ago. During the past three months, the average estimate has moved down from 50 cents. Between one and three months ago, the average estimate moved down. It also has dropped from 31 cents during the last month. Analysts are projecting profit to rise by 57.1% versus last year to 91 cents.

Past Earnings Performance: The company met estimates last quarter after beating the forecasts in the prior two. In the second quarter, the company reported net income of 35 cents per share versus a mean estimate of profit of 35 cents per share. In the first quarter, the company beat estimates by 2 cents.

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A Look Back: In the second quarter, profit fell 43% to $21.1 million (33 cents a share) from $36.9 million (56 cents a share) the year earlier, meeting analyst expectations. Revenue fell 0.1% to $184 million from $184.2 million.

Stock Price Performance: Between July 11, 2012 and October 4, 2012, the stock price fell $6.34 (-27.6%), from $23.01 to $16.67. The stock price saw one of its best stretches over the last year between June 14, 2012 and June 20, 2012, when shares rose for five straight days, increasing 6.3% (+$1.82) over that span. It saw one of its worst periods between June 29, 2012 and July 17, 2012 when shares fell for 12 straight days, dropping 29.1% (-$8.79) over that span.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 4.01 last quarter. Having a ratio above 2:1 is usually considered a good indicator of a company’s liquidity and ability to meet creditor demands. The company regressed in this liquidity measure from 5.5 in the first quarter to the last quarter driven in part by an increase in liabilities. Current liabilities increased 58.5% to $113.2 million while assets rose 15.6% to $454.3 million.

Key Stats:

After experiencing income drops the past three quarters, the company is hoping to use this earnings announcement to rebound. Net income fell 13.3% in the fourth quarter of the last fiscal year, by 62.2% in the first quarter and again in the second quarter.

On the top line, the company is hoping to use this earnings announcement to snap a string of two-straight quarters of revenue declines. Revenue fell 18.6% in the first quarter and dropped again in the second quarter.

Wall St. Revenue Expectations: Analysts predict a decline of 9.8% in revenue from the year-earlier quarter to $173.3 million.

Analyst Ratings: There are mostly holds on the stock with nine of 13 analysts surveyed giving that rating.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)

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