January 20, 2010 / 5:59 PM / 10 years ago

UPDATE 1-Adtran forecasts sequential fall in Q1 rev, shares fall

* Sees Q1 rev down mid-to-low single-digits sequentially

* Sees Q1 gross margins to continue in high 50s

* Shares down as much as 4 pct

Jan 20 (Reuters) - Networking and communications equipment provider Adtran Inc (ADTN.O) forecast a mid-to-low single-digit percentage decline sequentially in first-quarter revenue, citing seasonality, sending its shares down as much as 4 percent.

Adtran expects first-quarter revenue to be impacted by spending patterns at the company’s Tier 1 and Tier 2 customers and timing of President Barack Obama’s broadband stimulus funds, among other factors, Chief Financial Officer Jim Matthews said on a conference call Wednesday.

Analysts were looking at revenue of $122.5 million, according to Thomson Reuters I/B/E/S.

The company, whose major customers include AT&T Inc (T.N) and Verizon Communications Inc (VZ.N), expects gross margins to continue in the high fifties range in the first quarter, it said.

For the fourth quarter, the company posted gross margins of 59 percent.

President Obama’s broadband stimulus package has potential for material impact in 2010 and beyond, but there might not be any meaningful impact in the first quarter, Chief Executive Tom Stanton said.

A small number of the first round of available funds has been granted till date and the second and third rounds of funding are expected to be completed by the end of September, Adtran said.

The Obama administration has set aside $7.2 billion as part of its $787 billion economic recovery package to bring broadband access to the unserved and underserved U.S. communities.

On Tuesday, Adtran posted better-than-expected quarterly results, helped by strength in its internetworking and broadband access segments [ID:nWNAB5756].

Shares of the company were down 34 cents at $22.53 in afternoon trade on Nasdaq. They earlier touched a low of $21.88. (Reporting by Manasi Phadke in Bangalore; Editing by Maju Samuel)

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