MUNICH (dpa-AFX) - Telecom equipment supplier Adtran Networks (formerly Adva Optical) has started the new year in the red. According to a press release issued on Tuesday, Group CEO Tom Stanton said that the sluggish investment behavior of customers coupled with a simultaneous reduction in inventories was presenting Adtran Networks with major challenges. The SDax-listed company in Munich announced that sales in the first quarter had fallen by 39 percent to around 110 million euros compared to the same period last year.

Adjusted for special effects, earnings before interest and taxes (EBIT) slipped from plus 9.7 million euros in the previous year to minus 3.4 million euros. The bottom line was a loss of 1.2 million euros - in the previous year, Adtran Networks had reported a profit of 3.6 million euros.

The US parent company Adtran Holdings had already announced on Saturday night that it would have to write off goodwill in the three-digit million euro range. A non-cash impairment of around 293 million US dollars (272.5 million euros) is expected for the so-called goodwill, which is exclusively attributable to the Network Solutions segment. The impairment would lead to an increased operating loss of the same amount in the first quarter.

The reasons for the impairment are a lower market capitalization of the company, the cautious investment behavior of service providers due to the economic uncertainties and the ongoing adjustments to customers' inventories. However, the forecast for the operating margin adjusted for special effects for the period remains unchanged. Adtran Holdings is also listed on the SDax./ngu/zb