ADTRAN Tops, Beats Revenue Record

ADTRAN Inc., a global provider of networking and communications equipment, reported second quarter 2011 revenues of 56 cents per share that surpassed the Zacks Consensus Estimate of 51 cents.

Revenue climbed 22.5% year over year to $184.2 million and was so then ahead of the Zacks Consensus Estimate at $179 million. Stellar performances by the company's three main growth products -- Broadband Access, Internetworking and Optical Access --led to its fifth consecutive quarterly revenue record.

The combined year-over-year growth for these products

The combined year-over-year growth for these products was a substantial 48%. Individually, Broadband Access shot up 71% year over year, driven by the continued adoption of total access 5000 and fiber-to-the-node platforms. Internetworking products grew 18% boosted by channel expansion and new product offerings. Optical Access increased 36% on higher mobile data demand.

We believe ADTRAN remains so then positioned to benefit from the current market dynamics. Additionally, the company's three key products lines have registered continued revenue highs. 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 Qwest-CenturyLink Inc. merger can have adverse effects on ADTRAN's revenue growth thereby restricting its profitability.

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