ADTRAN Inc. (ADTN), a global provider of networking and communications equipment, declared robust third quarter earnings of 50 cents per share, which surpassed the Zacks Consensus Estimate of 43 cents and the year-ago quarter results of 34 cents, based on strong revenues.
Net profit jumped 49% year over year to $32.1 million from $21.6 million in the year-ago quarter.
Revenue
Total revenue increased 27% year over year to approximately $163.0 million compared with $128.1 million in the year-ago quarter, driven by strong demand for high speed residential and enterprise network services along with a healthy growth in mobile demand.
Of the company’s product line, Broadband Access grew 53% year over year while Internet posted 39% growth.
Gross margin increased 160 basis points to 59.7% in the third quarter, with growth somewhat restricted by a 22.5% year-over-year increase in cost of sales. Selling, general and administrative expenses, as a percentage of revenue, declined 140 bps to 18.1%, while research and development expenses slipped 200 bps to 14.0%.
Operating margin was 27.6% compared with 22.6% in the comparable quarter of 2009.
Liquidity
At the end of the third quarter, ADTRAN had cash and cash equivalents, including short-term investments, of $182.9 million compared with $196.6 million at the end of fourth quarter 2009. The company maintains zero debt balance but has a long-term liability to pay bonds, which were flat with full-year 2009 at $47.8 million.
Dividend
The company’s board of directors declared a cash dividend of 9 cents per share, payable on November 11, 2010 to shareholders of record on October 28, 2010.
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