ADTRAN, Inc. ADTN reported healthy fourth-quarter 2024 results, with both top and bottom lines beating the respective Zacks Consensus Estimates. The company recorded a top-line expansion year over year driven by solid demand trends in the Network Solutions business. Management’s focus on cost optimization and enhancing its operating model to ensure higher long-term shareholder returns is a positive.

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ADTN’s Net Income

On a GAAP basis, the company incurred a net loss of $45.9 million or 58 cents per share compared with a loss of $109.9 million or $1.40 in the year-ago quarter. The top-line growth, cost discipline and lower operating expenses led to bottom-line improvement.

Non-GAAP net income was $45 million or break-even per share against a loss of $14.5 million or 19 cents in the year-ago quarter. The figure beat the Zacks Consensus Estimate by 2 cents.

In 2024, GAAP net loss was $441.04 million or a loss of $5.67 per share compared with a loss of $259.34 million or $3.39 in 2023. Non-GAAP net loss was $31.3 million or a loss of 36 cents per share compared with a loss of $47.3 million or 60 cents in 2023.

ADTN’s Revenues

Net sales during the quarter increased to $242.9 million from $225.5 million in the prior-year quarter. Increasing service provider spending and lower customer inventories are driving the growth. Revenues were up from the mid-point of the company’s guided range. The top line beat the consensus estimate of $240 million.

In 2024, the company reported $922.7 million in revenues down from $1.14 billion in 2023.

Network Solutions contributed $197 million in revenues compared with $180.4 million in the prior-year quarter backed by healthy demand trends in several regions. Services and Support revenues improved to $45.8 million from the year-earlier quarter’s tally of $45 million.

ADTN’s Other Details

Gross margin on a Non-GAAP basis was 42%, marginally up from 41.9% in the year-ago quarter. Non-GAAP operating income was $7.9 million against an operating loss of $3.2 million in the year-ago quarter.

ADTN’s Cash Flow & Liquidity

In 2024, ADTRAN generated $103.07 million of cash from operating activities against a cash utilization of $45.6 million in 2023. In the fourth quarter, the company generated $4.54 million in cash from operations against a cash utilization of $16.3 million in the prior year quarter.

As of Dec 31, 2024, the company had $77.6 million in cash and cash equivalents and $33.2 million of deferred compensation liability compared with respective tallies of $87.16 million and $29.03 million in 2023.

ADTN’s Outlook

For the first quarter of 2025, management anticipates net sales in the range of $237.5-$252.5 million, with non-GAAP operating margin is expected in the range of 0% to 4%.

ADTN’s Zacks Rank

ADTRAN currently carries a Zacks Rank #3 (Hold).

Key Picks

InterDigital IDCC sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

In the trailing four quarters, it delivered an earnings surprise of 158.41%. It is a pioneer in advanced mobile technologies that enable wireless communications and capabilities. The company designs and develops a wide range of advanced technology solutions used in digital cellular, wireless 3G, 4G and IEEE 802-related products and networks.

Celestica Inc. CLS sports a Zacks Rank #1 at present. The company provides competitive manufacturing technology and service solutions for printed circuit assembly and system assembly, as well as post-manufacturing support to many of the world's leading original equipment manufacturers.

United States Cellular Corporation USM sports a Zacks Rank of 1 at present. In the last reported quarter, it delivered an earnings surprise of 150%.

U.S. Cellular has taken concrete steps to accelerate subscriber additions and improve churn management. The company aims to offer the best wireless experience to customers by providing superior quality network and national coverage. It is well-positioned to support the investment required for network enhancements, including the deployment of 5G technology.

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