ADTRAN Inc. provided earnings guidance for the third quarter and gross margins guidance for the fourth quarter of 2013. For the quarter, the company expects total revenues will increase sequentially in the range of mid to high single-digit percentage points. Although gross margins have continued to improve this year, the company's European business continues to be at lower gross margins as compared to organic business and large fluctuations in volume between those 2 businesses can drive variations in the company's consolidated gross margin. The company expects consolidated gross margins to decline due to increased volumes in European business as a result of newly awarded business from a large carrier. The company expects GAAP gross margins for the third quarter will be in the mid to high 40s percentage point range. The company expects the consolidated tax rate to be in the mid-20s percentage range -- percentage point range to pretax income.

The company expects gross margins will begin to improve in fourth quarter of this year as the company begins to see some benefit from product cost reductions.