Yahoo Finance ADTRAN Holdings, Inc. (ADTN) Down 16.7% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for ADTRAN Holdings (ADTN). Shares have lost about 16.7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is ADTRAN Holdings, Inc. due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
ADTRAN’s Q4 Loss Wider Than Expected on Lower Revenues
ADTRAN 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.
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.
How Have Estimates Been Moving Since Then?
It turns out, estimates review flatlined during the past month.
The consensus estimate has shifted -27.78% due to these changes.
VGM Scores
Currently, ADTRAN Holdings, Inc. has an average Growth Score of C, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
ADTRAN Holdings, Inc. has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
ADTRAN Holdings, Inc. belongs to the Zacks Technology Services industry. Another stock from the same industry, Nu Holdings Ltd. (NU), has gained 9.8% over the past month. More than a month has passed since the company reported results for the quarter ended December 2023.
Nu reported revenues of $2.4 billion in the last reported quarter, representing a year-over-year change of +65.8%. EPS of $0.08 for the same period compares with $0.03 a year ago.
For the current quarter, Nu is expected to post earnings of $0.09 per share, indicating a change of +125% from the year-ago quarter. The Zacks Consensus Estimate has changed -5.6% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Nu . Also, the stock has a VGM Score of C.
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ADTRAN Holdings, Inc. (ADTN) : Free Stock Analysis Report
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