AFC stock up on solid quarter, positive outlook

Broadband access equipment maker Advanced Fiber Communications saw its stock close up more than 17% on Friday after announcing solid results for the second quarter and sounding a cautiously optimistic note about the coming periods.

For the quarter ending June 30, the company posted revenues of about $78.6 million, compared to revenues of $101.2 million year over year. Including an $8.2 million unrealized gain on trading securities, net income was about $7.9 million, or 9 cents per share.

Excluding the gain on trading securities, net income was $2.8 million, or 3 cents per share, beating the consensus analyst estimate of two cents taken from First Call/Thomson Financial.

On top of the positive earnings news, the company indicated its business is starting to gain momentum after a rocky first half of 2001.

John Schofield, AFC’s CEO, said he remains cautious but has seen some “encouraging signs” involving industry spending.

According to Schofield, the company saw year-over-year growth in its traditional market of small and medium-sized operating companies.

In addition, Schofield said, “during the last 60 days, I have seen encouraging signs in [ILEC] accounts as our order flow has improved,” though “I see no signs of encouragement in the CLEC arena.”

The solid news from AFC led several investment banks to upgrade their ratings and price targets on AFC.