ADTRAN's third quarter was marked by revenue growth, continuing operational cost-cutting and a big boost to its EPON business that's expected to impact sales in 2019.
The Huntsville, Ala.-based networking vendor posted sales of $140.3 million for the quarter ended Sept. 30, compared with $185.1 million in the year-ago quarter. Net income for the quarter was $7.6 million, versus $15.9 million last year. Non-GAAP earnings per share were $0.21 for the recently ended quarter; 12 months ago, they were $0.37. The company's total revenue increased 10% quarter-over-quarter. (See How Fiber Plays a Key Role in Orange's Convergent Network Plans.)
ADTRAN's business continued to grow, said company Chairman and CEO Tom Stanton during an analyst call this morning. In addition to seeing a 40% increase in its burgeoning cable MSO sales, ADTRAN began selling super-vectoring solutions to a new US Tier 2 provider, he said. Rural business, through the Connect America Fund, is mapping upward too, Stanton said.
"Our CAF business is up nicely, both on a quarter-to-quarter and year-over-year basis," he said. "As expected, we saw a total pickup in Gfast. We sold almost 70,000 ports worldwide for the quarter."
Some of those Gfast ports arrived in Australia, where NBN (not called out by ADTRAN in this call, but the Australian national provider is a known, named customer) began receiving shipments. However, Gfast modems shipped later in the quarter after ADTRAN encountered some "last-minute lab issues," Stanton said, and the remainder will arrive at NBN in the last quarter of 2018.
ADTRAN also won a hotly contested contract for 10 Gbit/s EPON for a "very, very large MSO" in the United States.
"We were selected for that deployment during toward the tail end of Q3. We have some lab activity and things to work on. That is the single biggest EPON award we've been given," Stanton said. "We still ship EPON... to a few customers in the US. Both of those did very well in the quarter. They highlighted the growth we saw in the business."
US Gfast sales, however, did not live up to their name. They were "sluggish," ADTRAN's CEO said. It's not a question of technology; rather, it's a question of actually selling the solutions into deployments -- something the vendor is optimistic will happen, given Gfast's success elsewhere in the world and its natural fit in many scenarios.
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