Citing customer inventory corrections which impacted its Subscriber Solutions product line, ADTRAN announced that its preliminary revenue for Q1 is now expected to be between $322 million and $326 million as compared to prior guidance of $355 million to $375 million.
ADTRAN also said supply constraints prevented the company from meeting customer demand across all categories. The resulting preliminary GAAP operating margin is expected to be between -14% and -17%. Preliminary non-GAAP operating margin is expected to be between -1% and -2.5%.
ADTRAN’s Chief Executive Officer, Tom Stanton, stated, “Growing customer concerns over inventory stocking levels affected our first quarter Subscriber Solutions category. We believe that this over-supply condition in CPE products will continue into the second quarter. Revenue for our Access and Optical Networking products grew sequentially. Supply constraints, however, limited our flexibility to clear past-due backlog across all product categories. We believe that the inventory impact is transitory, and we expect to see some improvement during the second quarter. We plan to adjust expenses in the near term to reflect current conditions, however we do not see any material changes to our near-term opportunities and our long-term growth catalysts as carriers around the world race to upgrade their networks to fiber.”
