Infinera dives due to guidance, CFO departure; Ciena and suppliers also lower

Though its Q3 results beat estimates, Infinera (INFN -9.4%) guided on its CC (transcript) for Q4 revenue of $130M-$140M and EPS of breakeven to -$0.04, below a consensus of $141.1M and $0.03. Gross margin is expected to fall back to ~40% after rising to 49% in Q3 (+1000 bps Q/Q and Y/Y).

While Infinera expects to benefit from "a number of significant new wins and deployments" in Q4, the company doesn't "expect significant budget flush or year-end money" from carriers.

Moreover, while Infinera has won a number of new deals - five new purchase commitments were scored for its DTN-X optical transmission platform - deal timing "remains challenging because of [Infinera's] short lead times and the strategic nature of many of these customer decisions."

Ciena (CIEN -7.3%) is selling off on the guidance and commentary, as are many optical component suppliers. Ericsson's numbers might not be helping either. CIEN -7.6%. FNSR -7.2%. JDSU -3.4%. NPTN -2.4%. OCLR -2.3%. AFOP -3.2%.

Infinera also disclosed CFO Ita Brennan is resigning, effective Feb. 28, 2014, to work for a startup. The company says it will start a search for a replacement.

Comments (5)
  • jasonpfuhrman
    , contributor
    Comments (3) | Send Message
    I recently entered the trading arena. I bought what I thought was a good set of stocks, including WWWW, and AFOP. So far, my position in AFOP is down 13.76%, in just six days. I wonder if I made a mistake. Any advise for a beginner with a stomach full of regret?
    24 Oct 2013, 01:27 PM Reply Like
  • msteck
    , contributor
    Comments (53) | Send Message
    Just the most basic advice, I guess. Diversify! Buy stocks from many different sectors. if the the stocks you listed above are your only holdings, then you are too tech heavy and should buy something in the energy or finance or healthcare etc... Jim Cramer (who is mostly hated around here) has some good advice for beginners on diversification:


    Personally, I also think CIEN is a better play than AFOP but that's up to you to decide.
    24 Oct 2013, 02:35 PM Reply Like
  • jasonpfuhrman
    , contributor
    Comments (3) | Send Message
    I appreciate that. I also own SYC, PFE, VZ, T, AOL, and a couple of mutual funds. Thanks again.
    24 Oct 2013, 04:24 PM Reply Like
  • Chris Adams
    , contributor
    Comments (10) | Send Message
    Jason, the best thing you can do is read about the great investors: buffet, munger, lynch, graham. Trading is a fools game, what you want to do is buy businesses for the long haul and rest at night. Notice that no great investor speculates on the best tech of the day, etc. They buy companies that will be here 40 years from now still thriving. Go join and follow everything Joe Mayger does. He follows these basic principles and I could not be happier with my results over the last 5 years.
    24 Oct 2013, 10:55 PM Reply Like
  • jasonpfuhrman
    , contributor
    Comments (3) | Send Message
    Excellent advice, I am sure. Thank you very much. My strategy is to buy "forever" stocks. Since I am just starting out however, and my investment in AFOP would be worth so much more if I put it in GOOG or AAPL instead, I am just feeling the pain of, at least temporary, regret. I am sure in the years to come I will have a stomach of iron, but today; not so much.
    25 Oct 2013, 07:58 AM Reply Like
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