Adtran’s CEO says Q4 2017 performance impacted by merger review, Tier-1 customer spending cut

Adtran issued a challenging fourth-quarter outlook due to a pending acquisition and tighter spending at one of its large Tier-1 telco customers.

Tom Stanton
Tom Stanton

“Our performance this quarter has been significantly impacted by a merger-related review and slowdown in the spending at a domestic Tier 1 customer,” CEO Tom Stanton said in a release. “Our current understanding is that this review will be completed in 60 to 90 days, at which time capital plans will be finalized.”

Stanton added that several new customer wins will bode well for its financial outlook in 2018.

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“Going forward, recent awards and trials in Tier 1 customer accounts, both domestically and abroad, leave us very confident about our positioning,” Stanton said.

The vendor said it forecasts revenue to be about $125 million. Adtran will report its fourth-quarter earnings during a conference call on Wednesday, January 17, 2018.

Non-GAAP earnings per share for the quarter are expected to be approximately 1 cent. GAAP earnings per share for the quarter, assuming dilution, are expected to be a loss of approximately 4 cents.

This would be down from third quarter 2017 sales of $185.1 million and net income of $15.9 million.

While Adtran did not reveal the identity of the customers, the vendor has been making inroads at large Tier-1 customers like AT&T, Verizon and CenturyLink for its SDN-related products like Mosaic as well as NG-PON2 and Gfast.

Adtran said that it expects revenue for the first quarter of 2018 will be in the range of the fourth quarter of 2017.