ADC (ADCT) Slammed On Guidance Cut

Shares of ADC Telecommunications (NASDAQ: ADCT) are 24% lower today after the company lowered their 2008 guidance range, citing lower sales in the U.S.

ADC said it expects sales from continuing operations for fiscal 2008 to be in the range of $1.500-$1.520 billion. Previous annual guidance was $1.520-$1.540 billion and the Wall Street consensus is $1.53 billion.

ADC explained that the updated outlook primarily reflects lower sales of copper and fiber connectivity products in the United States resulting mainly from customers' recent budget reviews and ordering patterns, as well as the resulting effects on original equipment manufacturers' demand for ADC products.

ADC also said it expects its third quarter sales to be 3-5% lower than the second quarter and expects its fourth quarter sales to be around the third-quarter level. Gross margins in 2008 are now expected to be around 34% for the second half and around 35% for the full year compared to previous guidance of 36% for the full year.

Two Wall Street firms, Friedman Billings and Robert W. Baird, downgraded the stock today due to the lower guidance.

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