ADTRAN Outperforms Yet Again

ADTRAN Inc., a global provider of networking and communications equipment, reported first quarter 2011 revenues of 52 cents per share surpassing the Zacks Consensus Estimate of 46 cents. The quarter’s results as well improved from 29 cents earned per share in the year-ago quarter on strong revenue.

Record-breaking $165

Revenue climbed 30% year over year to a record-breaking $165.5 million and was then ahead of Zacks Consensus Estimate of $163 million. The quarter’s record revenue was attributable to its three main growth products –– Broadband Access, Internetworking and Optical Access –– all of which reached their all-time highs.

The combined year-over-year growth for the three growth products was a substantial 51%. Individually, Broadband Access grew 42% year over year, driven by continued adoption of the total access 5000 platform. Internetworking products grew 48% boosted by the expansion of channel and new applications. Optical Access soared 86% owing to higher mobile data demand.

The last year

ADTRAN’s three growth products are constantly delivering record earnings from the last year and are expected to continue doing so henceforth. We believe the company is benefiting from several new product cycles in broadband access, wireless backhaul products, fiber to the node, Ethernet over copper, optical and enterprise VoIP (Voice over Internet Protocol).

However, competitive threats, regulations and customer concentration may limit the company’s growth. ADTRAN generates the majority of its revenue from big customers just as AT&T Inc., Verizon Communications and Qwest Communications. The merger of Qwest with CenturyLink Inc. previously this month would have adverse effects on revenue growth thereby restricting the company’s profitability.