Analysts from Dell’Oro Group warned 2023 could be ripe for CPE inventory corrections, thanks in part to lower than expected broadband deployment targets and a slowdown in activity that normally drives broadband growth. A press release from Adtran this week indicates the trend may have already begun.
Adtran on Monday lowered its Q1 2023 revenue guidance from an original range of $355 million to $375 million to between $322 million and $326 million. CEO Tom Stanton cited “growing customer concerns over inventory stocking levels” as the reason for the change and said the issue primarily impacted its Subscriber Solutions line of CPE products rather than its Access and Optical Networking offerings.
As of Q4 2022, Subscriber Solutions was Adtran’s second largest business category, with $120.3 million in revenue. Optical Networking accounted for $142.2 million in revenue while Access and Aggregation contributed $95.7 million.
Dell’Oro Group VP of Broadband Access and Home Networking Jeff Heynen told Fierce Adtran has a strong presence in the U.S. market, but much of its recent growth has come from Europe. In Q4, the U.S. accounted for around 40% of revenue, with remainder coming from International revenue driven by strength in Europe. But because of the types of customers it has in each market, Heynen said it’s more likely the Q1 warning is related to a pullback from a large European operator.
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