ADTRAN's (ADTN) Q4 Loss Wider Than Expected on Lower Revenues

ADTRAN Holdings, Inc. ADTN reported soft fourth-quarter 2023 results, wherein both the bottom line and the top line missed the respective Zacks Consensus Estimate. The company recorded a top-line contraction year over year due to geopolitical tension, forex volatility and tough competition from other players in the market.

Net Income

On a GAAP basis, the net loss in the December quarter was $109.9 million or a loss of $1.40 per share against an income of $38.9 million or 49 cents per share in the prior-year quarter. The year-over-year decrease was primarily due to revenue contraction and an income tax benefit in the year-ago quarter. Non-GAAP net loss was $85.9 million or a loss of $1.09 per share against net income of $70.8 million or 89 cents per share in the year-ago quarter. The loss was wider than the Zacks Consensus Estimate of a loss of 9 cents.

In 2023, the GAAP loss was $267.6 million or a loss of $3.41 per share compared with a loss of $2 million or a loss of 3 cents per share in 2022. Non-GAAP net loss in 2023 was $118.6 million or a loss of $1.51 per share against net income of $82.6 million or $1.32 per share in 2022.

ADTRAN Holdings, Inc. Price, Consensus and EPS Surprise ADTRAN Holdings, Inc. Price, Consensus and EPS Surprise

ADTRAN Holdings, Inc. price-consensus-eps-surprise-chart | ADTRAN Holdings, Inc. Quote

Revenues

Net sales during the quarter declined to $225.4 million from $358.3 million in the prior-year quarter, owing to weak demand trends. The top line missed the consensus estimate of $232 million. In 2023, revenues improved to $1.15 billion from $1.03 billion in 2022.

Network Solutions contributed $180.4 million in revenues compared with $317.5 million in the prior-year quarter. The persistence of an unfavorable macroeconomic environment and forex volatility in the international market constrained the capex spending from customers. Services and Support revenues were $45.1 million, up from $40.8 million a year ago. Healthy demand for its professional services supported the growth.

Other Details

Total cost of sales decreased from $250.9 million to $147 million. GAAP gross profit came in at $78.5 million compared with $107.4 million in the prior-year quarter. Operating loss in the quarter was $37.6 million compared with an operating loss of $32.9 million in the year-ago quarter.

Cash Flow & Liquidity

In 2023, ADTRAN used $52.9 million of cash for operating activities compared with $44.2 million in 2022. As of Dec 31, 2023, the company had $87.2 million in cash and cash equivalents with $29 million of deferred compensation liability compared with the respective tallies of $108.6 million and $26.7 million in the prior-year period.

Zacks Rank & Stocks to Consider

ADTRAN currently has a Zacks Rank #3 (Hold).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

NVIDIA Corporation NVDA, currently sporting a Zacks Rank #1, delivered a trailing four-quarter average earnings surprise of 20.18%. In the last reported quarter, it delivered an earnings surprise of 13.41%.

NVIDIA is the worldwide leader in visual computing technologies and the inventor of the graphic processing unit. Over the years, the company’s focus evolved from PC graphics to AI-based solutions that support high-performance computing, gaming and virtual reality platforms.

InterDigital, Inc. IDCC, carrying a Zacks Rank #2 (Buy) at present, delivered a trailing four-quarter average earnings surprise of 170.50%. In the last reported quarter, it delivered an earnings surprise of 16.53%.

IDCC is a pioneer in advanced mobile technologies that enable wireless communications and capabilities. The company engages in designing and developing a wide range of advanced technology solutions, which are used in digital cellular as well as wireless 3G, 4G and IEEE 802-related products and networks.

Arista Networks, Inc. ANET, carrying a Zacks Rank #2 at present, is likely to benefit from strong momentum and diversification across its top verticals and product lines. The company has a software-driven, data-centric approach to help customers build their cloud architecture and enhance their cloud experience. Arista has delivered an earnings surprise of 13.28%, on average, in the trailing four quarters.

The company holds a leadership position in 100-gigabit Ethernet switching share in port for the high-speed data center segment. It is increasingly gaining market traction in 200 and 400-gig high-performance switching products and remains well-positioned for healthy growth in the data-driven cloud networking business with proactive platforms and predictive operations.

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

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