ADC Sinks on Soft Guidance

It blames phone-company consolidation.
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ADC Telecom (ADCT) - Get Report blew past fiscal third-quarter targets, but warned of a slight sales slowdown ahead.

The Minneapolis networking-equipment maker posted adjusted earnings, excluding one-time items, of 30 cents a share in its fiscal third quarter ended in July. That compares with 31 cents in the fiscal second quarter and 33 cents a year ago. Analysts were looking for an adjusted profit of 26 cents a share.

Sales in the quarter were $344 million, thanks to a 77% year-over-year increase in fiber optic-connection gear sales. That number is down from $358 million in the fiscal second quarter, but up from the $308 million in sales a year ago.

Looking ahead, the company expects its full-year sales growth rate to fall below the industry's growth rate due to spending cuts and consolidation among phone-company customers.

The company predicts revenue from continuing operations will be between $1.27 billion and $1.28 billion. Wall Street was expecting sales for the fiscal year ending in September to be about $1.32 billion.

ADC says adjusted earnings, however, will be about 90 cents a share, in line with analysts' estimates.

ADC shares fell 60 cents to $14.15 in after-hours trading Tuesday.