Adtran sees possible Tier 2 spending decline

Network equipment vendor Adtran reported second quarter earnings that included a profit of $22.4 million, about 34 cents per share, on revenues of $131 million, but the bigger news coming out of Adtran's earning call was the observation that spending by Tier 2 carriers in general may slow down in the near future, and may already have slowed down--at least for Adtran--where Tier 2 telco Embarq is concerned.

The largest Tier 1 carriers have not appeared to have changed spending patterns yet during a rocky year economically in the telecom industry and other industries. A revenue scare among carriers late last year and early this year turned out not to be as bad as first thought. As second-quarter earnings reports unfold in the next few weeks, watch closely for other signs that Tier 2 telcos may be touching the brakes.

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