Sector Wrap: Telecommunications equipment makers
NEW YORK (AP) — Telecommunications equipment makers were mixed in Wednesday trading after Adtran Inc., which offered a disappointing third-quarter forecast in late September, said it expects a significant revenue decline in the fourth quarter.
Adtran makes equipment that links homes and businesses to the Internet. In a filing with the Securities and Exchange Commission, the company said its revenue may decline by a "teens" percentage compared to the third quarter. Adtran said the decline was due to "typical seasonality combined with the current telecom equipment spending environment."
On Thursday the company forecast weaker-than-expected net income and revenue in the third quarter, pointing to the effects of the weak economy and regulatory issues. The Huntsville, Ala., company expects about $162 million in revenue in the third quarter, and a mid-teens decline implies its revenue in the fourth quarter will be between $131 million and $141 million.
Analysts were expecting Adtran to report $171.8 million in revenue, according to FactSet.
Stifel Nicolaus analyst Sanjiv Wadhwani said Adtran's revenue usually falls in the mid-single digits from the third quarter to the fourth. He thinks Adtran will be aggressive about controlling its costs because of its weakening revenue.
Adtran shares lost 73 cents, or 4.3 percent, to close at $16.38 on Wednesday. Earlier the stock fell to $15.73, its lowest price in almost three and a half years. Adtran is down almost 40 percent since the company reported disappointing second-quarter results on July 10.
Elsewhere shares of data network equipment maker Juniper Networks Inc. dipped 12 cents to close at $16.61 and shares of Tellabs Inc., which makes networking equipment for telecommunications companies, fell 2 cents to $3.41.
Shares of Cisco Systems Inc., the world's largest maker of computer networking equipment, rose 6 cents to close at $18.93.