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Tickers in this Article: ADTN, T, VZ, APKT
Communication networking solution provider, ADTRAN Inc. (ADTN) is improvising its Channel Partner Program to enhance financial incentives and rewards in partnership deals to support its business model. ADTRAN's channel partners remain vital to the company's growth given their contribution to investments and expanded sales coverage. The company's channel partner program provides new benefits like special discounts, specialized training in ADTRAN solutions and pre and post sales support.  

Other than the company's channel partnerships, we believe its organic growth will largely be based on recovery in the spending pattern of tiered carriers and the enterprise segment as well as the increased penetration of TA 5000. Professional services at domestic and international levels, mobile broadband infrastructure upgrade and funds generated through Broadband Stimulus projects will also aid growth.

The company has also registered significant growth in its professional service activities that provide deployment of the Total Access System components in telecommunication companies. The company projects that professional service capabilities will remain accretive, as both domestic and international carriers seek cost-effective methods to accelerate network deployment.

However, ADTRAN's near-term growth will be under pressure due to weak performances by the company's traditional products, mainly HDSL. Regulatory factors, heavy reliance on key customers such as AT&T Inc. T) and Verizon Communications (VZ) as well as high spending on expansion could also restrict the company's revenue stream and profitability.

Other Stocks

Acme Packet, Inc. (APKT), which has a Zacks Rank #1 (Strong Buy) is another company in this sector, which we believe is worth considering.

ADTRAN has a Zacks Rank #3 (Hold) rating.

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