AFC reports lower revenue, adjusts past quarters

Advanced Fibre Communications (www.afc.com) reported lower sequential quarterly revenue and poor visibility, but also reported an 8% increase in year-over-year revenues. Revenues for AFC’s third quarter of 2002 rang in at $91,767,000, compared with $84,647,000 for the third quarter of 2001.

Net income for the third quarter of 2002 was $9,599,000, or 11 cent on a diluted earnings per share basis, which contrasts to net income of $15,576,000, or 18 cents per diluted share, for the year ago period.

“The revenue ramp is likely slower than previously expected,” said John Schofield, president and CEO of AFC. “In the third quarter we saw signs of slower customer spending,” Schofield said, adding that he does expect sales in the fourth quarter to be higher for the company.

Providers Alltel, Sprint and Verizon all ended the quarter as 10% customers. And according to Schofield, the company hasn’t been experiencing significant pricing pressures from its customers.

“There have been a couple instances of [pricing pressure], but it’s not the norm,” said Schofield.

In addition to releasing the quarter’s news, AFC also revealed that it had incorrectly accounted some previous financial results and will be making an adjustment to its results for 2001 and the first two quarters of 2002. The change comes as a result of a $1.7 million after-tax charge associated to a Florida facilities lease, which should have been taken in the fourth quarter of 2001.

The change isn’t expected to have any impact on revenue or cash flows for the company. It is also expected to have a positive impact on the first two quarters of 2002.