Quarter 2 earnings were 43% weaker than last quarter due to decreased demand. Earnings fell to $21.1 million or 33 cents a share. Revenue fell .12% to $184 million. Analysts expected earnings of 35 cents a share and revenue of $190 million. ADTN declared a cash dividend of 9 cents a share.
Adtran provides services such as production, design, support and marketing products and solutions for networking communications. Although earnings contracted, certain sectors of the company showed growth. The broadband access sector grew 38% over the year, optical and internet gre 17% and account for 84% of revenues.
David Cornes holds a degree in economics from the University of Montana.
The Hang Seng bucked the trend rising .1% today due to strong infrastructure stocks. Investors are jumping into cement and railway stocks after Premier Wen Jiabao said China must maintain reasonable investment growth. China Railway Construction jumped 5.2% while Anhui Conch Cement rose 2.8%. Sun Hung Kai properties rose 3.6% after JPMorgan upgraded them to underweight from overweight and upped its target price 10%. China’s banks are still holding them down after a fresh report of bad debt fears.
European shares are timid, yet slightly up, with the FTSEurofirst adding .1% due to gains in defensive stocks. Luxury brands Burberry is feeling the strain down 5% pulling with it French rival LVMH who is down 2.5% due to reports of a slowdown in Burberry’s quarterly sales. The Spanish IBEX 35 index is looking top gainer so far today, up over 1.4%.
Best buy, who is down 4.4% in pre-market due to an HHGregg guidance cut, announced its new Canadian strategy to open smaller stores and go into non-core categories online, while also launching a new price-matching program.
BAC, down 1.1% in pre-market, announced it cutting jobs in its commercial banking unit to deal with the waning economy.
Commodities are beginning looking up this morning with crude, natural gas and silver all adding while gold is set to begin down.
Contributer Chris Rygh is currently pursuing his MBA in Wisconsin and has a passion for the Market. Comments can be directed to ryghcw19@uww.edu
Purchase applications were announced this morning and this week the report shows and increase of 3% while the refinance applications are down 3%. At 8:30am the International Trade report will be announced. April brought a decline in the trade gap but only because of a drop in imports. At 10am the wholesale inventory consensus will be announced. In April the inventories rose 0.6% but not enough to match the increase in sales of 1.1%.
At the close yesterday the S&P 500 was still down at 0.81% decline. There is hope for today though due to the stock index futures advance, according to Reuters. As for 10-year treasuries and oil they both closed on an increase of 0.35% and 1.19% respectively. The dollar on the other hand was down 0.19% at the close.
As for the earnings season today should be a positive day with 9 out of the 15 announcements projected to be positive. The big announcement to watch out for today is Marriott, the company is estimated to increase EPS by 13.52%.
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Unprofitable: I lose money on this trade if ADTN closes above $26.25 or below $21.75 by July 20, 2012. The most I can lose on this trade is the amount I bought the Spread for $.75.
Risk: $75 per 1 lot
Reward: $225 per 1 lot
Chart: Bearish overalll and I think that it will break under the $27 level and the measured move target is $24.30.
UPDATE 7.21.2012 I took half of my position off for a double and $1.50 and the other half ended up with $.65 for a total average of $1.05. Another winner, but I wish it did not sell-off as much as it did.
Advanced Micro Devices slumped after the company cut its second-quarter revenue outlook late Monday, citing weaker-than-expected business conditions in China and Europe. Also weighing on tech stocks was Applied Materials own after the firm lowered its full-year guidance to reflect weaker-than-expected demand in its semiconductor business.
Alcoa was the Dow’s biggest decliner after industrial metals producer posted an earnings loss late Monday amid slumping aluminum prices. Alcoa’s report, the first by a blue-chip company, unofficially kicks off earnings season.’
In economic news, the National Federation of Independent Business’s small-business optimism index fell in June to its lowest reading since October, missing expectations.
Finally, JC Penny (JCP) fell -5.81% after analysts of Credit Suisse said second quarter sales are looking worse than the 20% drop posted in the first quarter. The department store retailer cut 350 jobs on top of the 600 employees they laid off in April.
S&P 500 futures fell 4 points to 1345.25, NASDAQ futures fell 11.25 points to 2594.75, and Dow Jones Industrial Average futures gained 6 points to 12691.00.
WTI crude futures fell 91 cents to $85.08 and gold futures fell $2.10 to $1587.00.
Traders around the world that broker through PFGBest’s may be the victim of an MF Global-like fallout after they posted that they had missing client segregated funds. The 37th largest futures brokerage is guilty of lying about an estimated $200 million in missing customer funds.
Advanced Micro Devices (AMD) fell 10.50% after cutting its Q2 guidance due to low demand expectations from China and Europe.
MAKO Surgical (MAKO) fell over 39% on low demand expectations.
The women’s retailer Coldwater Creek Inc. (CWTR) gained 51.15% after receiving funding from Golden State Capital.
James River Coal Co. (JRCC) continued to fall (-20%) with news that competitor Patriot Coal (PCX) filed for bankruptcy last night.
David Cornes holds a degree in economics from the University of Montana.
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