Adtran misses target in Q3 due to supply chain constraints

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Adtran felt the sting of supply chain woes in the third quarter, taking $ 9 million in stress-related spending and falling short of previously set policy goals.

The company published Preliminary results which showed revenues of $ 138 million, an operating loss of $ 10.1 million and a non-GAAP gross margin of 34.6% for the quarter. These figures compare with revenue of $ 133.1 million and net profit of $ 5.5 million in the prior year quarter, and revenue of 143.2 million. dollars with net income of $ 5.1 million in the second quarter of 2021.

Adtran had previously predicted that third quarter revenue would fall to between $ 138 million and $ 158 million and that non-GAAP gross margin would vary from 41% to 43% during its second quarter earnings call in August. However, at the time, CFO Michael Foliano warned it experienced “extreme constraints on the electronic components market” which were expected to continue into the third quarter.

The company said in a press release that it would have met its gross margin target without the $ 9 million in supply chain expenses.

RELATED: Adtran Aims For Fiber Reinforcement With $ 931 Million Deal To Buy ADVA In Germany

Tom Stanton, CEO of Adtran, tried to put a positive turn on things in a statement, noting that the company “is experiencing record demand” for its products and set a record for quarterly bookings in the third quarter. He added “We secured two additional Tier 1 fiber customers and we previously reported that Tier 1 fiber customers significantly increased their reservations for our fiber access platforms” during the quarter.

In total, bookings were up 43% year-over-year in the third quarter, the company said.

Adtran insisted that he is working closely with suppliers to address supply chain challenges. He said those issues are expected to peak in the second half of this year before starting to normalize in mid-2022.

“Importantly, we expect the impact on Adtran’s results to be largely transient,” the company concluded.


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