Why ADTRAN (ADTN) Stock Is Lower Today

NEW YORK (TheStreet) -- ADTRAN (ADTN) is sliding on Wednesday after warning of lower profit margins in its second quarter and after a mixed first-quarter report.

By early afternoon, shares had taken off 6.3% to $23.11.

The communications networks specialist said it expects gross margins for its second quarter to fall to between 49% and 50%, lower than first-quarter margins of 52.9%. The company also reiterated revenue guidance of $172 million to $180 million.

For its first quarter ended March, ADTRAN posted net income of 17 cents a share, in line with analyst estimates, and revenue of $147 million. Analysts surveyed by Thomson Reuters anticipated revenue of $149.65 million.

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TheStreet Ratings team rates ADTRAN INC as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:

"We rate ADTRAN INC (ADTN) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and growth in earnings per share. However, as a counter to these strengths, we find that we feel that the company's cash flow from its operations has been weak overall."

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