Is ADTRAN Inc. (ADTN) Poised to Beat Earnings Estimates? - Analyst Blog


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ADTRAN Inc. ( ADTN ) is set to release its fourth-quarter fiscal 2013 results before the opening bell on Jan 22, 2013.

In the last quarter, the company delivered a 31.82% earnings surprise. Let's see how things are shaping up for this announcement.

Factors to be Considered this Quarter

ADTRAN continues to perform creditably despite a challenging business environment. Increased penetration of TA 5000 platform, professional services at domestic and international levels, mobile broadband infrastructure upgrades and funds generated through Broadband Stimulus projects will continue to drive its future growth prospect.

Recently, ADTRAN enhanced its technical services and support program division. The new ProServices platform offers an innovative ProStart installation program, ProCare maintenance program and ProCloud managed networking services. The company also started offering ProCloud Wi-Fi Private Label services in Europe which we believe will not only bolster its new revenue stream but will also lure new customers.

However, a weak macroeconomic spending environment, foreign currency risk and stiff competition from other OEM manufacturers may act as headwinds for the company while moving ahead.

Earnings Whispers

Our proven model does not conclusively show that ADTRAN is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) for this to happen. Unfortunately, this is not the case here as elaborated below.

Zero Zacks ESP: This is because both the Most Accurate estimate and the Zacks Consensus Estimate are poised at 14 cents. This leads to an ESP of 0.00% for ADTRAN.

Zacks Rank #3 (Hold): ADTRAN's Zacks Rank #3, decreases the predictive power of ESP.

We caution investors against the stock going into the earnings announcement, as a Zacks Earnings ESP of 0.00% combined with a Zacks Rank #3 lowers the possibility of an earnings surprise.

Other Stocks to Consider

Here are some other companies to consider as our model shows they have the right combination of elements to post an earnings beat this quarter.

Crown Castle International Corp. ( CCI ) has Earnings ESP of +6.25% and carries a Zacks Rank #2 (Buy).

SBA Communications Corp. ( SBAC ) has Earnings ESP of +150% and carries a Zacks Rank #2 (Buy).

Equinix, Inc. ( EQIX ) has Earnings ESP of +6.58% and carries a Zacks Rank #3 (Hold).

ADTRAN INC (ADTN): Free Stock Analysis Report

CROWN CASTLE (CCI): Free Stock Analysis Report

EQUINIX INC (EQIX): Free Stock Analysis Report

SBA COMM CORP (SBAC): Free Stock Analysis Report

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Earnings , Stocks
More Headlines for: ADTN , CCI , EQIX , SBAC

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