ADC Telecommunications Inc. (ADCT) Posts Q1 2010 Results, Offers Guidance for Q2

on February 10 2010 7:50 AM

ADC Telecommunications Inc. today posted its unaudited results for the first quarter ended January 1, 2010, reporting solid results it says are driven by operational strength.

Because of a change to the company’s fiscal year to September 30, ADC compared first quarter 2010 results with the proforma results for the prior year’s first quarter ended December 26, 2008, and the proforma results for the fourth quarter of fiscal 2009 ended September 30, 2009.

For the first quarter of fiscal 2010, ADC reported GAAP earnings from continuing operations at $3.6 million, or $0.04 per share.

Net sales for first quarter were reported at $265.6 million, compared to $299.7 million for the first quarter of fiscal 2009 and $291.2 million for the fourth quarter of 2009. The company said the decrease was impacted by the global economic downturn, as well as usual and expected seasonality and decline in major carrier spending.

ADC posted first-quarter gross margin at 34.7 percent, compared to adjusted gross margin of 29.5 percent for the same quarter last year, and 34.4 percent in the previous quarter. The company attributes the increase to its efforts to improve operating costs, thereby offsetting negative impact of lower revenue.

“ADC’s strong first quarter results demonstrate the positive impact of our ongoing efforts to streamline operations,” Robert E. Switz, chairman, president and CEO of ADC stated in the press release. “We delivered very good gross margins, managed operating expenses effectively in the face of what remains a challenging CAPEX-spending environment, and bolstered our already strong liquidity position. Based on these results, we’re pleased with the continued improvements in our financial performance and expect to demonstrate further progress as we move through fiscal 2010.

The company also offered its outlook for the second quarter of fiscal 2010 ending April 2, 2010. ADC said it expects net sales between $260 million and $280 million, with GAAP diluted earnings per share between a loss of $.04 to earnings of $.06. This guidance includes a non-cash amortization expense of $.05 per share, as well as non-cash charges or restructuring charges that the company says it cannot estimate at this time.

Switz said as the company maintains its dedication for improvement, it anticipates generating advances in the marketplace.

“As we continue to realize the benefits of our improved operations, we expect to drive additional earnings power by maintaining our commitment to creating a more effective and efficient organization,” added Switz. “We also are making strategic gains in the marketplace with our focus on the areas of greatest opportunity in fiber and wireless networks worldwide, exhibited in part by the strength of our business in China and a significant sequential increase in wireless sales in the first quarter.”