Customer project delay prompts weaker forecast
Adtran Holdings (NASDAQ:ADTN) shares dropped 14% on Wednesday after the networking equipment provider lowered its preliminary second-quarter 2026 revenue outlook, citing a delay to a major customer project.
The company now expects second-quarter revenue to be between $280.0 million and $282.0 million, below its previous guidance of $283.0 million to $303.0 million and short of the analyst consensus estimate of $293.4 million.
Management said the revised outlook reflects the impact of the delayed customer project, along with continued pressure from elevated component and freight costs.
Margin expectations also revised lower
Adtran also reduced its profitability outlook for the quarter.
Preliminary non-GAAP operating margin is now expected to range from 3.5% to 4.0%, down from the company’s previous forecast of 5.0% to 9.0%.
On a GAAP basis, operating margin is projected to be between negative 3.2% and negative 4.0%.
The company expects preliminary non-GAAP basic and diluted earnings per share of between $0.03 and $0.05.
GAAP basic and diluted loss per share attributable to Adtran Holdings is forecast to range from $(0.12) to $(0.14).
“Our preliminary second quarter results were directly impacted by a project delay from a single customer. In addition, margins reflected the current elevated component and freight cost environment,” commented Tom Stanton, Chairman and Chief Executive Officer.
Third-quarter guidance remains cautious
Looking ahead, Adtran expects third-quarter 2026 revenue to be between $275.0 million and $295.0 million.
The company also forecast a non-GAAP operating margin of between 1.5% and 5.5% for the period, indicating that cost pressures may continue into the second half of the year.
Final results due in August
Adtran said it plans to release its final second-quarter financial results after the market closes on August 3, 2026, followed by an earnings conference call on August 4.
The company noted that the figures released on Wednesday are preliminary, unaudited and remain subject to completion of its quarter-end financial reporting process.