Tech Industry

ADC Telecom gains on 2Q earnings

ADC Telecommunications was able to buck Friday's sell-off, pushing up 2 5/8, or 4 percent, to 63 1/16 after it easily topped analysts' estimates in its second quarter.

In the quarter, ADC Telecom earned $94 million, or 29 cents a share, on sales of $709 million. It also announced that its chief executive will resign in the next year.

First Call Corp. consensus pegged ADC Telecom for a profit of 26 cents a share in the quarter.

The $709 million in sales represents a 55 percent improvement compared to the year-ago quarter when it earned $45 million, or 15 cents a share, on sales of $457 million.

"The rapid growth of the Internet and broadband communications is a powerful driver accelerating ADC's financial performance to record levels for any quarter," said CEO William Cadogan in a prepared release. "Communications service providers are aggressively pushing forward on their Internet and broadband initiatives using ADC's network equipment, software and integration services."

ADC also announced that Cadogan will retire from the company.

Company officials said it has formed a succession committee, and Cadogan will leave following a transition to his successor, a process which is expected to be completed within the next 12 to 18 months.

Cadogan has been ADC's president and CEO since 1991 and chairman of the board since 1994.

Last quarter, ADC hurdled analysts' estimates, earning $84 million, or 18 cents a share, on sales of $544.6 million.

Its shares peaked at 65 1/4 earlier this month after falling to a 52-week low of 17 3/16 in August.

Twenty of the 21 analysts covering the stock rate it either a "buy" or "strong buy."

First Call consensus expects it to earn $1.05 a share in the fiscal year.