HUNTSVILLE, Ala. -- ADTRAN announced today preliminary estimates of certain financial results for the third quarter ended September 30, 2019. Based upon preliminary information, revenue for the quarter is expected to be approximately $114 million. Earnings per share for the quarter, assuming dilution, is expected to be a loss of approximately $0.96. Non-GAAP earnings per share for the quarter, assuming dilution, is expected to be a loss of approximately $0.06. Earnings per share is expected to be affected by a one-time, non-cash, valuation allowance of approximately $37 million, that will be recorded to income tax expense in the Company's consolidated income statement to reduce the carrying value of the Company's deferred tax assets.
ADTRAN Chief Executive Officer Tom Stanton stated, "Our revenue this quarter has been significantly impacted by a pause in shipments to a Tier 1 customer in Latin America and the continued slowdown in the spending at an international Tier 1 customer. With the exception of these two large customers, revenues generated from the rest of our business grew 20% over the previous quarter. Although we expect our Latin American customer sales to rebound, our current visibility regarding timing is limited. For the international Tier 1 customer, we expect that sales should resume with the new capital cycle in 2020.
"Our current expectation for revenue for the fourth quarter of 2019, is that it will be flat to slightly down from the third quarter. Additionally, we plan for our non-GAAP operating expenses during the fourth quarter to be approximately 10% below our second quarter non-GAAP expense rate.
In connection with our confirmation at the end of the third quarter of the extent of the decline in revenue during the quarter (which fell below our expectations) and management's current expectations for revenue in the fourth quarter of 2019, we are establishing a valuation allowance against our deferred tax assets. The deferred tax assets represent timing differences in the recognition of certain tax benefits for accounting and income tax purposes, including the expected value of future tax savings that will be available to offset future taxable income through the Company's net operating loss carryforwards. In future periods, the Company may be able to reduce some or all of the valuation allowance upon a determination that it will be able to realize such tax savings, thereby reducing its future tax liability and recognizing an income tax benefit within the consolidated income statement.
Non-GAAP earnings per share excludes the effect of the valuation allowance, restructuring expenses, stock-based compensation expenses, asset impairments, amortization of losses related to the Company's pension plan, and acquisition-related expenses, amortizations and adjustments.
The Company confirmed that it will hold a conference call to discuss its third quarter results Thursday, October 31, 2019, at 9:30 a.m. Central Time. ADTRAN will webcast this conference call. To listen, simply visit the Investor Relations site at approximately 10 minutes prior to the start of the call and click on the conference call link provided.
An online replay of the conference call, as well as the text of the Company's earnings release, will be available on the Investor Relations site approximately 24 hours following the call and will remain available for at least 12 months. For more information, visit www.investors.adtran.com or via email at firstname.lastname@example.org.
Many Tier 1 MSOs have yet to choose between EPON and GPON, and their natural ties to IEEE standard-based technologies plus EPON's accelerated future timeline, could make this an attractive standard for large cable ops, ADTRAN engineering exec Jess Beihoffer tells BBWN.
The federal watchdog agency recommends the FCC consider eliminating the old cost-accounting program since it's more prone to fraud than the alternative reimbursement method among small, rural providers that receive about $2.5 billion annually to deploy broadband.
The strength of natural disasters like hurricanes is worsening, scientists say, and it's imperative that broadband infrastructures can withstand or be speedily repaired post-catastrophe, writes Fiber Broadband Association President and CEO Lisa Youngers.
After suffering many quarters of financial and broadband subscriber losses, Frontier Communications' bond owners are ready for dramatic change – including a replacement for CEO Dan McCarthy (pictured), Bloomberg reports today, citing several sources.
The ongoing debate around GPON vs EPON can get as heated as discussions around politics and religion, but both technologies offer some advantages over the other depending on the needs your network is servicing.
In this webinar, we will focus on the facts around the GPON vs EPON debate and how that technological decision is almost always made based on factors outside the technology itself.
In this insightful Light Reading radio show, Kurt Raaflaub, Head of Strategic Solutions Marketing, will outline the key service provider challenges, deployment considerations, next-gen Gigabit technologies, and service models to win market share in the rapidly growing MDU market.