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ADTRAN Inc. Reports Operating Results (10-Q)

August 03, 2012 | About:
10qk

10qk

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ADTRAN Inc. (ADTN) filed Quarterly Report for the period ended 2012-06-30.

Adtran, Inc. has a market cap of $1.34 billion; its shares were traded at around $21.405 with a P/E ratio of 13 and P/S ratio of 1.9. The dividend yield of Adtran, Inc. stocks is 1.7%. Adtran, Inc. had an annual average earning growth of 16.5% over the past 10 years. GuruFocus rated Adtran, Inc. the business predictability rank of 4-star.

Highlight of Business Operations:

Sales were $184.0 million and $318.7 million for the three and six months ended June 30, 2012 compared to $184.2 million and $349.7 million for the three and six months ended June 30, 2011. Product revenues for our three primary growth areas, Broadband Access, Optical Access and Internetworking, were $155.0 million and $259.7 million for the three and six months ended June 30, 2012 compared to $132.1 million and $237.7 million for the three and six months ended June 30, 2011. Our gross margin decreased to 51.7% and 53.1% for the three and six months ended June 30, 2012 from 58.0% and 58.8% for the three and six months ended June 30, 2011. Our operating income margin decreased to 14.6% and 13.5% for the three and six months ended June 30, 2012 from 27.9% and 27.7% for the three and six months ended June 30, 2011. Net income was $21.1 million and $34.0 million for the three and six months ended June 30, 2012 compared to $36.9 million and $71.2 million for the three and six months ended June 30, 2011. Our effective tax rate increased to 35.7% for the three months ended June 30, 2012 from 34.0% for the three months ended June 30, 2011 and increased to 35.6% for the six months ended June 30, 2012 from 32.5% for the six months ended June 30, 2011. Earnings per share, assuming dilution, were $0.33 and $0.53 for the three and six months ended June 30, 2012 compared to $0.56 and $1.08 for the three and six months ended June 30, 2011.

ADTRANs sales decreased 0.1% from $184.2 million in the three months ended June 30, 2011 to $184.0 million in the three months ended June 30, 2012, and decreased 8.9% from $349.7 million in the six months ended June 30, 2011 to $318.7 million in the six months ended June 30, 2012. The decrease in sales for the three months ended June 30, 2012 is primarily attributable to a $23.1 million decrease in sales of our HDSL and other legacy products and an $8.0 million decrease in sales of our Optical products, substantially offset by a $29.0 million increase in sales of our Broadband Access products and a $1.9 million increase in sales of our Internetworking products. The decrease in sales for the six months ended June 30, 2012 is primarily attributable to a $53.0 million decrease in sales of our HDSL and other legacy products, a $14.7 million decrease in sales of our Optical products, partially offset by a $26.7 million increase in sales of our Broadband Access products and a $10.0 million increase in sales of our Internetworking products.

Enterprise Networks sales decreased 7.2% from $33.7 million in the three months ended June 30, 2011 to $31.3 million in the three months ended June 30, 2012, and increased 3.7% from $66.9 million in the six months ended June 30, 2011 to $69.4 million in the six months ended June 30, 2012. The decrease for the three months ended June 30, 2012 is primarily attributable to a decrease in sales of Internetworking products and legacy products. The increase for the six months ended June 30, 2012 is primarily attributable to an increase in Internetworking product sales, partially offset by a decrease in sales of legacy products. Internetworking product sales attributable to Enterprise Networks were 91.1% of the divisions sales in the three and six months ended June 30, 2012, compared to 85.4% and 85.2% in the three and six months ended June 30, 2011. Legacy products primarily comprise the remainder of Enterprise Networks sales. Enterprise Networks sales as a percentage of total sales decreased from 18.3% for the three months ended June 30, 2011 to 17.0% for the three months ended June 30, 2012 and increased from 19.1% for the six months ended June 30, 2011 to 21.8% for the six months ended June 30, 2012.

International sales, which are included in the Carrier Networks and Enterprise Networks amounts discussed above, increased 128.9% from $23.4 million in the three months ended June 30, 2011 to $53.6 million in the three months ended June 30, 2012, and increased 100.7% from $35.8 million in the six months ended June 30, 2011 to $71.9 million in the six months ended June 30, 2012. International sales, as a percentage of total sales, increased from 12.7% for the three months ended June 30, 2011 to 29.1% for the three months ended June 30, 2012, and increased from 10.2% for the six months ended June 30, 2011 to 22.6% for the six months ended June 30, 2012. International sales increased in the three and six months ended June 30, 2012 compared to the three and six months ended June 30, 2011 primarily due to sales attributable to the acquired NSN BBA business and an increase in organic sales in Latin America.

Our long-term investments increased 4.9% from $332.0 million at December 31, 2011 to $348.4 million at June 30, 2012. The primary reason for the increase in our long-term investments during 2012 was cash generated from operations. Long-term investments at June 30, 2012 and December 31, 2011 included an investment in a certificate of deposit of $48.3 million, which serves as collateral for our revenue bonds, as discussed below. We have various equity investments included in long-term investments at a cost of $18.1 million and $12.8 million, and with a fair value of $35.9 million and $31.3 million, at June 30, 2012 and December 31, 2011, respectively.

Read the The complete Report

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10qk
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