In an attempt to enhance shareholders' return, communication
network solution provider,
) announced that its board of directors has authorized an
additional share repurchase plan. The new plan will commence
following the completion of the current share repurchase plan,
which was announced on Oct 2011.
The additional share buyback is a continuation of ADTRAN's
share buyback policy, as the company authorized a similar share
repurchase plan of an additional 5 million common stocks at the
end of third-quarter 2011. At the end of the recently ended
quarter, ADTRAN had 506,538 shares left to be repurchased from
its previous plan.
Per the new plan, ADTRAN will buyback additional 5 million
shares and will be implemented through open market transaction or
through privately-negotiated deals. Nevertheless, the share
buyback timing will depend on the market condition. The
shareholders also reacted positively to the news as the stock
price soared nearly 2% in the Thursday trade on Nasdaq.
Recently, ADTRAN reported better-than-expected first-quarter
2013 financial results, beating the Zacks Consensus Estimate in
both the fronts. The results were positively impacted by an
improved spending atmosphere and increased strategic investment
on the part of the carrier customers of the company, which
Verizon Communication Inc.
ADTRAN has sufficient cash to carry out this program. The
company exited the first quarter of fiscal 2013 with $247.9
million of cash & marketable securities and with an
outstanding debt of around $46 million. Thus, we believe that the
company's plans to renew its share buyback plan will not only
boost its share prices but will also drive the company's earnings
per share, going forward.
Currently, ADTRAN carries a Zacks Rank #3 (Hold). Another
stock in the same industry which is worth considering is
). Currently, the stock carries a Zacks Rank #2 (Buy).
ADTRAN INC (ADTN): Free Stock Analysis Report
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