Adtran's Q1 2016 revenue dips slightly to $142.2M, but expects uptick in carrier spending

Adtran says that despite a small dip in first quarter 2016 revenues it is seeing potential revenue opportunities from service provider customers, creating a new future revenue foundation.

Speaking to investors during the first quarter 2016 earnings call, CEO Tom Stanton said the company expects "further improvement in the carrier environment as customers accelerate investments in upgrading their network infrastructure."

Specifically, this will include carriers involved in CAF-II builds as well as cable operators and CLECs making network upgrades.

With many of the large carriers having accepted the CAF-II funding last August, Stanton said its customers are still in the planning stages

"Not all of the people with CAF, particularly the Tier 2 carriers, are really in full deployment yet so we're still fairly early in that process and the rate of return carriers really have yet to be seen," Stanton said. "Whether we hit the peak run rate this year or next year, my sense is we won't hit the peak this year because half of the money isn't online yet so we'll have to see how that plays out."

Stanton added it is seeing orders coming in from cable MSOs and CLECs that are in the process of refreshing their networks.

"We're focused on CAF and many people that follow us are focused on what will happen with CAF funding, but we're in a backdrop where we think the infrastructure is in general going to go through an upgrade cycle because of what's happening in the MSO space and what's happening with alternative carriers," Stanton said.

Adtran is also participating in an ongoing trial alongside Nokia (NYSE:NOK) and Huawei with BT (NYSE: BT).

Stanton said that the trial is ongoing and that the telco has not made its vendor selection yet.

"As far as what's going on in Europe with the trial, it's still open," Stanton said. "We'll continue to work with the large carrier over there that's going through a trial, but there's been no decision at this point in time."

Overall, Adtran reported that overall revenues dropped 0.4 percent year over year to $142.2 million, down from $142.8 million.  

However, the vendor's results surpassed financial analyst consensus estimates of $141 million.

Despite the year-over-year decline, Adtran's first quarter net income was $5.01 million compared to $3.3 million for the first quarter of 2015.

From a segment perspective, Adtran reported Carrier Systems and Business Network revenues of $100.1 million and $35.6 million, respectively.

Shares of Adtran were listed at $19.09, up 4 cents, or 0.21 percent in Wednesday morning trading on the Nasdaq stock exchange.

For more:
- see the earnings release

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