ADTRAN had warned its fourth quarter wasn't going to be great, and it was right. The good news is that it wasn't as bad as expected and that it offers hope for 2020.
Revenues for the final three months of 2019 came in at $115.8 million, down 17% from the same quarter a year ago, but better than the $11.8 million Wall Street analysts had, on average, expected. Net loss after one-time items came in at 7 cents per share, better than the 13 cents loss anticipated.
The vendor's share price added $0.57, or 5.7%, to hit $10.50 in Thursday morning trading. A year ago the stock was trading at $14.30.
"While the US market remains challenging, we saw a solid performance in our international business," noted Chairman and CEO Tom Stanton in the vendor's financial statement. Its major customers outside the US are Deutsche Telekom in Germany and Telmex in Mexico, both of which had slowed demand in 2019, dragging down sales numbers. (See ADTRAN's Revenues Plunge in Q3 .)
"We continue to see activity building around our 10G PON and fiber extension solutions across all geographies we serve, most notably in Europe. We believe we are at the beginning of a significant investment cycle for fiber deployment driven by technology advancements, regulatory influences and vendor disruption," he added.
In the fourth quarter, network equipment accounted for $96.2 million, down from $116.9 million a year earlier, while services and support sales dipped to $19.6 million from $23.2 million a year ago.
For the full year, ADTRAN reported revenues of $530 million, just up from 2018's total, with network gear accounting for $455.2 million. In 2019, 56.8% of revenues came from the US, up from 54.5% in 2018.
The hope for 2020 is that international demand ramps, fixed access network investments improve at DT and Telmex and fiber broadband investments pick up at the major operators, but also at Tier 2 and 3 operators, in the US, especially in 10G PON, where ADTRAN is seen as one of the leading vendors.
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