MUNICH (dpa-AFX) - Telecom equipment maker Adtran Networks (formerly Adva Optical) expects a weak second half after a solid second quarter and has therefore lowered its forecasts. "As delivery times for components have shortened considerably, many customers are currently focusing on optimizing their inventories, which is having an impact on incoming orders," the company, which is listed on the SDax small-cap index, said in Munich on Monday. "In addition, high inflation and rising interest rates are weighing on customers' investment behavior."

In terms of revenue, Adtran Networks now expects a decline in sales in the high single-digit to low double-digit percentage range. Previously, the subsidiary of U.S. company Adtran Holdings, which is also listed on the SDax, had held out the prospect of growth in this range. The forecast for operating profit has also been reduced. Parent Adtran Holdings also disappointed with its third-quarter forecast and second-quarter figures.

Shares of the two companies slipped in early trading. Adtran Networks shares were last down one percent at up to 19.90 euros. The U.S. company Adtran Holdings had completed the acquisition in the summer of 2022 and has since held around two-thirds of the shares in the now renamed Adtran Networks.

The US company had offered Adva shareholders 0.8244 of its own shares per paper at the end of August 2021. The German company was thus valued at 17.17 euros per share when the bid was announced. Since the announcement, the share prices have developed very differently. The value of Adtran Networks shares, for example, has risen by almost 60 percent since then.

In contrast, Adtran Holdings shares, which are listed in the United States, lost more than 60 percent of their value after the takeover plans became known. Shares traded in Germany lost around three percent to 7.85 euros on Monday after the key data and quarterly forecast were announced.

The US company is now only valued at the equivalent of around 620 million euros. By comparison, the subsidiary Adtran Networks is now valued at just over one billion euros. The shares held by Adtran Holdings are therefore worth around 675 million euros, which is more than the US company itself.

Adtran Networks no longer gave a specific forecast for profits, but merely announced that the margin measured in terms of adjusted operating earnings before interest and taxes (Ebit) would be in the low single-digit percentage range. Measured against the reduced target for sales, according to which earnings will mathematically fall to around 640 million euros, this results in an operating profit that is significantly below the previous year's figure of 50 million euros. Previously, the German company had held out the prospect of an increase.

According to preliminary figures, operating profit rose sharply again in the second quarter. It was around 12 million euros, almost twice as high as in the previous year. Sales increased by slightly more than two percent to 170 million euros. Adtran Networks plans to present further information on the second quarter on Tuesday (August 8).

Parent company Adtran Holdings saw revenue increase by just over one percent to $327 million (297 million euros) compared to the start of the year. Adjusted for costs related to the acquisition of Adtran, depreciation and amortization and restructuring costs, the company earned money again operationally. The operating profit adjusted for special effects had been around 3.6 million dollars, after it had still been in the loss zone in the first quarter.

However, according to the company's own forecast, this is where the US company will return to, as the forecast range for the operating margin is between minus five and zero percent. This is significantly less than experts had recently expected. Sales are expected to fall to between $275 million and $305 million. That's significantly less than analysts were forecasting./zb/jcf/mis