UBS Cuts Price Target on ADTRAN, Inc. (ADTN) Following 2Q Earnings Call

UBS reiterates a Neutral rating on ADTRAN (NASDAQ: ADTN), and cuts the price target to $17.00 (from $18.00), following 2Q15 earnings call. ADTN guided 3Q Rev/EPS in line with consensus at $160m/$0.21.

Analyst Amitabh Passi commented, "On its earnings call, ADTN guided 3Q Rev/EPS (excl. stock comp) in line with cons at $160m/$0.21. ADTN is seeing a general improvement in both tier 2/3 spending, with Connect America Fund (CAF) phase 1 orders expected to come through till the end of 2015 (Phase 2 to start 2016). ADTN also had a new 10%+ customer in 2Q. On the other hand, we believe Deutsche Telekom (DT) sales were ~flat q/q in what should be a seasonally strong qtr. Overall, different parts of the business continue to counteract each other and sales visibility into key accounts remains low. We'd highlight that our new forecasts imply a y/y aggregate sales decline for FY15 of 2.6%. Further, it appears that normalized gross margins could be back in the mid to high 40s range, down from the high 40s to low 50s range previously. Maintain Neutral."

For an analyst ratings summary and ratings history on ADTRAN click here. For more ratings news on ADTRAN click here.

Shares of ADTRAN closed at $16.12 yesterday.

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