Adtran says Q3 results will be impacted by slower enterprise, softer European spending

Adtran gave a preview of its third-quarter 2014 earnings, announcing that revenue should be in the $162 million to $163 million range, but results will be impacted by slowness in its European and enterprise service lines.

This is a decline from the second quarter, where it reported that revenues were $176 million, up year-over-year from $162 million in the second quarter of 2013 due to an uptick in broadband and carrier sales, particularly in the international arena.

GAAP earnings per share for the quarter are expected to range from $0.19 to $0.20, while non-GAAP earnings per share for the quarter are expected to range from $0.23 to $0.24.

"Although we did see a sequential increase on our domestic carrier business, that increase was not enough to overcome the more than expected sequential decrease in our European business and a softer enterprise spending environment," said Tom Stanton, CEO of Adtran, in a release. "We expect a material improvement in results beginning in 2015 as we see a re-acceleration in carrier spending both in Europe and the U.S."

Stanton added that "we believe the shortfall in enterprise spending was influenced by inventory corrections which we expect to be resolved as we enter 2015."

Despite the near-term struggles, Adtran remains bullish about the international market, particularly Europe. During the Connect event at its headquarters in Huntsville, Ala., in August, the vendor said that pending acquisitions being made by Deutsche Telekom and Vodafone could create potentially larger targets to enhance its presence in the European region.

Adtran will formally announce its earnings in a conference call at 10:30 a.m. EST on Oct. 15.

Shares of Adtran were trading at $19.05, down $1.25 or 6.16 percent, in late Friday morning trading on the Nasdaq stock exchange.

For more:
- see the release

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