UPDATE 1-ADC Telecom cuts '08 outlook, shares fall

Tue Jul 22, 2008 10:54pm BST
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(Recasts, adds details, share movement)

July 22 (Reuters) - Network equipment maker ADC Telecommunications Inc (ADCT.O: Quote, Profile, Research) lowered its 2008 outlook, reflecting lower sales of copper and fiber connectivity products in the United States, sending its shares down 16 percent.

The company, which makes broadband data access and infrastructure equipment, now expects 2008 earnings from continuing operations to be between 18 cents and 26 cents a share, compared with its earlier outlook of 31 cents to 39 cents a share.

For the full year, ADC now expects sales from continuing operations to be between $1.50 billion and $1.52 billion, down from its earlier outlook of $1.52 billion to $1.54 billion.

Due to the change in sales volume and product mix, the company lowered its gross margin to about 35 percent, compared with its previous outlook of 36 percent, ADC said in a statement.

Additionally, the company said it expects its third quarter 2008 sales to be 3 percent to 5 percent lower than the second quarter and expects its fourth-quarter 2008 sales to be around the third-quarter level.

For the second quarter, the company reported net sales of $403 million. Shares of ADC, whose biggest customers are AT&T (T.N: Quote, Profile, Research) and Verizon Communications Inc (VZ.N: Quote, Profile, Research), tumbled $2.17 to $11.20 in trading after hours. The shares closed up almost 2 percent at $13.37 in regular trading Tuesday on Nasdaq. (Reporting by Purwa Naveen Raman in Bangalore; Editing by Gopakumar Warrier)

 
 
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