FRANKFURT (dpa-AFX) - A surprisingly weak first fiscal quarter from Adtran has hit the shares of the U.S. telecom equipment maker in the MDax hard. In addition, the preliminary figures also weighed on the shares of German subsidiary Adva, which is listed in the SDax.

At midday, Adtran was down 11.4 percent to 12.22 euros at the bottom of the index for medium-sized companies. The share thus continued its downward trend - at 12.20 euros, it temporarily reached its lowest level again since its admission to the Prime Standard in mid-July 2022. The Prime Standard as an admission portal for companies includes important disclosure requirements and is an essential prerequisite for membership in the Dax family.

Shares in subsidiary Adva lost 2.2 percent to 20.50 euros in the SDax after slipping at times to their lowest level since October 2022 at 19.50 euros. The German telecoms equipment maker, in which Adtran holds just over 65 percent, had only returned to the index for the 70 smaller stocks below the MDax in December.

Telecom equipment maker Adtran had fallen short of its own targets and analysts' expectations on both first-quarter revenue and profit. Two traders were particularly critical of the operating margin, an important indicator of profitability. After all, Adtran now expects the margin, measured by earnings adjusted for special items, to be between minus 2.5 percent and minus 1.0 percent. "In contrast, the company's margin target was previously plus 5.0 percent to plus 6.5 percent, while the average analyst estimate was 5.9 percent," both said.

According to a telecom equipment expert, while it shouldn't have come as a surprise that margins declined, "the magnitude is underground." However, he believes the company has a good outlook, especially within the United States. Because of supply shortages of semiconductors, however, the supply situation is still likely to have been poor and some components may not have been in sufficient supply. "Both Adtran and Adva enter into long-term supply contracts in some of their businesses, which makes it difficult to pass on price fluctuations to customers," he explained. But that alone did not justify the size of Adtran's profit warning, he said./ck/gl/jha/.