Infinera: Future Is Even More Exciting
Darspal S Mann
Darspal S Mann
Infinera: Raising Price Target As Performance And Potential Grow
Helix Investment Research
Helix Investment Research
Infinera: As Optical Networking Grows, So Too Does The Upside
Helix Investment Research
Helix Investment Research
Yesterday, 4:19 PM
Tue, Jul. 26, 5:35 PM
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Wed, Apr. 27, 5:41 PM
- Infinera (NASDAQ:INFN) has guided on its Q1 call for Q2 revenue of $255M (+/- $5M) and EPS of $0.17 (+/- $0.02), below consensus estimates of $272.2M and $0.22.
- The optical transport hardware vendor reports seeing "spending lumpiness" and uncertain investment timings among some clients. Rival Ciena (NYSE:CIEN) issued soft guidance in March, while blaming macro pressures and EMEA weakness. Juniper and Ericsson, which also have strong telecom capex exposure, have provided disappointing numbers this month.
- Infinera is now down 15.2% after hours to $13.20, after initially falling moderately in the wake of its mixed Q1 results. Ciena, which often goes in the same direction as Infinera, hasn't yet traded after hours since Infinera issued its guidance.
Wed, Apr. 27, 4:48 PM
- Infinera (INFN +3%) is giving up today's gains in postmarket trading, down 2.1% after Q1 results where overall revenues grew 31% but missed slightly.
- Gross margin (GAAP basis) came to 47.5%, vs. a year-ago 47.2% and Q4's 44.5%. Operating margin fell to 6.1% from a year-ago 8.1%, but up from Q4's 5.3%.
- Revenue breakout: Product, $216.1M (up 34.3%); Services, $28.7M (up 10.4%).
- "We continued to execute well in the first quarter, winning deals across our product portfolio and delivering strong financial results," says CEO Tom Fallon.
- Conference call to come at 5 p.m. ET.
- Press Release
Wed, Apr. 27, 4:18 PM
Tue, Apr. 26, 5:35 PM
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Thu, Mar. 3, 10:34 AM
- In addition to missing FQ1 sales estimates (while beating on EPS), Ciena (CIEN -20.6%) is guiding for FQ2 revenue of $615M-$645M, mostly below a $644.6M consensus. The company also used its earnings call to lower its FY16 (ends Oct. '16) revenue growth guidance to 5-8% from 8%-9%; consensus is for 8.4% growth.
- Fellow optical networking hardware firms Infinera (INFN -4.7%) and Adtran (ADTN -2.5%) are also lower. As are optical component firms NeoPhotonics (NPTN -9%), Fabrinet (FN -2.4%), Oclaro (OCLR -3.1%), and Lumentum (LITE -2.1%). NeoPhotonics jumped yesterday in response to strong earnings/guidance; Fabrinet and Oclaro did the same in February.
- Ciena reports seeing "some recent volatility in the broader macroeconomic environment." On the call, the company mentioned its EMEA sales are soft, and that it's making changes to deal with the issue.A strong dollar is also cited as a headwind. Ciena nonetheless expects to post above-market growth outside of EMEA.
- Ciena's top-line performance: Networking platforms revenue (packet-optical systems, optical transport systems, and Ethernet switches) rose 9% Y/Y in FQ1 to $449.5M. Software and software-related service revenue (inc. the Blue Planet SDN platform) rose 8% to $25.4M. Global services revenue rose 7% to $98.2M. One customer (AT&T?) accounted for 22% of revenue, and the U.S. overall accounted for 63.7% of revenue.
- Financials: Adjusted gross margin was 44.7% vs. 44.9% in FQ4 and 44.1% a year ago; GM is expected to be in the mid-40s once again in FQ2. Controlled spending helped adjusted op. margin rise 150 bps Y/Y to 8.3%. Ciena ended FQ1 with $995M in cash and $1.26B in long-term debt.
- JPMorgan is defending Ciena: The firm considers the FY16 revenue guidance cut reasonable given macro pressures, and thinks shares don't deserve to sell off more than a few percent. (source: Notable Calls)
- Ciena's FQ1 results, earnings release
Thu, Feb. 11, 5:38 PM| Thu, Feb. 11, 5:38 PM | 1 Comment
Thu, Feb. 11, 4:47 PM
- Though Infinera (NASDAQ:INFN) moderately beat Q4 estimates, shares have tumbled to $12.50 after hours.
- No guidance was given in the earnings release - Infinera typically guides on its earnings call, which starts at 5PM ET (webcast). It's possible markets were expecting a larger sales/EPS beat, similar to the one Infinera delivered in October.
- With the help of the Transmode acquisition, product revenue rose 43% Y/Y in Q4 to $227M, and services revenue 19% to $33M. GAAP operating expenses rose 43% to $102M, with $52.6M spent on R&D. Non-GAAP gross margin was 48.3%, up 80 bps Q/Q and 240 bps Y/Y, and above guidance of 47% (+/- 1%).
- Infinera's Q4 results, earnings release
- Update (6:27PM ET): Infinera provided in-line Q1 guidance on its earnings call Shares are now up 2.9%.
Thu, Feb. 11, 4:17 PM
Wed, Feb. 10, 5:35 PM
Wed, Feb. 3, 1:32 PM
- Though the Nasdaq is down 1.5%, many telecom equipment and optical component firms are rallying after network test equipment/telecom software provider Viavi (VIAV +17.6%) and optical component vendor Oclaro (OCLR +11.4%) beat calendar Q4 estimates and issued strong Q1 guidance.
- The list includes optical networking hardware firms Ciena (CIEN +3.9%) and Infinera (INFN +4.9%), component vendors Finisar (FNSR +5.3%) and Alliance Fiber (AFOP +2.2%), Wi-Fi hardware provider Ruckus (RKUS +3.5%), and VoIP and 4G signaling hardware/software firm Sonus (SONS +2.5%).
- Component maker NeoPhotonics (NPTN +14.7%) is posting double-digit gains, aided by an upgrade to Strong Buy from Raymond James. RJ says its checks point to strong sales fueled by Chinese demand and 100G metro optical buildouts.
- Oclaro guided for calendar Q1 (FQ3) revenue of $97M-$100M, soundly above a $90M consensus. The FQ2 beat was fueled by a 21% Y/Y increase in 100G product sales (53% of total revenue), which offset a 7% drop in sales of 10G and lower-speed products (35% of revenue). (earnings release)
- Viavi's beat was aided by a 5.7% Y/Y sales increase for the company's core network enablement (test instrument) business. The unit delivered Y/Y sales growth for the first time in five quarters. (earnings release)
- Viavi and Oclaro's numbers came shortly after optical component contract manufacturer Fabrinet soared in response to an FQ2 beat and strong FQ3 guidance. Fabrinet's revenue from 100G programs nearly tripled Y/Y in FQ2.
Dec. 10, 2015, 2:11 PM
- Ciena (CIEN -16.8%) has tumbled after issuing light FQ1 guidance to go with an FQ4 beat. In addition, the optical networking hardware vendor has guided for 8%-9% FY16 (ends Oct. '16) revenue growth, below a 13.8% consensus.
- With Ciena's outlook raising new fears about telecom capex (under pressure for a while), rival Infinera (INFN -3.3%) is also off, as are optical component vendors Lumentum (LITE -2.2%) and Alliance Fiber (AFOP -1.9%), VoIP/4G signaling infrastructure provider Sonus (SONS -1.6%), and network test equipment/software provider Viavi (VIAV -2%). The Nasdaq is up 0.7%.
- Northland Securities' Tim Savageaux has gone contrarian and upgraded Ciena to Outperform. He notes the company's FY16 outlook still implies an acceleration in organic sales growth (accounts for the Cyan acquisition) to over 7% from FY15's 3%, and calls the selloff an attractive entry point for buying an industry leader.
- Wells Fargo's Jess Lubert (Outperform rating) is also defending Ciena. "While we are disappointed by Ciena’s FQ1 and F2016 outlook, we sense the company’s forecast likely embeds conservative assumptions surrounding the Cyan business and the timing of revenue recognition on several large opportunities. That said, with Ciena having secured 100G metro deployments with many of the world’s largest carriers and likely to see improved mix further benefit margins, we remain positive regarding the company’s 2016/2017 prospects and see the potential for the current forecast to prove conservative if execution remains strong."
Earnings/guidance details: Ciena's FY16 op. margin is expected to be in a range of 11%-12% vs. 10.9% in FY15 before rising to ~15% in the next 3-4 years. Gross margin (non-GAAP) is expected to be in the mid-40s; it was at 44.9% in FQ4, -40 bps Q/Q and +700 bps Y/Y.
The company had two 10%+ customers in FQ4 (possibly AT&T and Verizon) that collectively made up 29.6% of revenue. Non-U.S. customers were 34.5% of revenue, and Cyan contributed $84.4M (12% of total revenue), primarily via its Z-Wave packet-optical (integrated optical networking/Ethernet switching) platform. Altogether, packet-optical products made up 70% of revenue, packet networking (Ethernet switches) 9.2%, optical transport 2.4%, and software/services 18.4%. (earnings release)
Oct. 28, 2015, 1:42 PM
- Optical component vendors NeoPhotonics (NPTN +12.6%), Oclaro (OCLR +9.4%), Viavi (VIAV +6.9%), Finisar (FNSR +3.8%), Alliance Fiber (AFOP +4%), and Fabrinet (FN +3.1%) are rallying after optical transport hardware vendor Infinera (INFN +14.6%) beat Q3 estimates and issued strong Q4 guidance. Infinera rival Ciena (CIEN +3.4%) hit yesterday by a bearish Off Wall Street report, is also doing well.
- For Oclaro, the shoe is now on the other foot: Infinera rallied last week after Oclaro pre-announced strong calendar Q3 sales.
- On the earnings call (transcript), CEO Tom Fallon stated Infinera saw "a substantive increase" in sales of its Cloud Xpress data center interconnect platform. Cloud Xpress customers now stand at 14 (up from 12 as of July), and growing machine-to-machine traffic within data centers is expected to boost demand for 100G interfaces. Infinera's core long-haul system sales were also healthy.
- Fallon did admit Infinera is seeing "some conflicting signals" regarding market demand. "On one hand, we are seeing some pockets of slightly softening demand. On the other, we're seeing positive indications in the industry, such as lead-times extending for optical components and continued capacity expansion from cloud providers." The optical component remarks might be contributing to today's rally in component makers.
- Needham's Alex Henderson, who upgraded Infinera earlier this month, is reiterating a Buy rating today. "Infinera reported a strong quarter and offered a strong guide in its first quarter with Transmode partially in the base and fully in the CY4Q guidance. Negative commentary on the Street on INFN and CIEN regarding industry price pressure has set-up a solid entry point and we expect investors will take advantage of this recent weakness."
Oct. 27, 2015, 5:46 PM
- In addition to beating Q3 estimates, Infinera (NASDAQ:INFN) has guided on its earnings call for Q4 revenue of $258M (+/- $5M) and EPS of $0.21 (+/- $0.02), favorable to a consensus of $250M and $0.19.
- Gross margin is expected to be at 47% (+/- 100 bps) after coming in at 47.5% (+10 bps Q/Q and +330 bps Y/Y) in Q3.
- Q3 results include Transmode's numbers from Aug. 20 onward. CEO Tom Fallon: "Our excellent [Q3] results reflect continued strength across our core business, including growing Cloud Xpress revenues as well as the initial contribution from the new metro business. Adding the recently announced metro core and long haul interconnect products along with Transmode's suite of metro solutions enables Infinera to further enhance the superior experience we deliver to our customers."
- Shares have jumped to $20.20 after hours. They sold off earlier this month following Infinera's analyst day.
- Q3 results, PR
Infinera Corp. engages in the provision of digital optical networking systems to telecommunication carriers. It operates through the following geographical segments: Americas; Europe Middle East and Africa; and Asia Pacific. Its products include data transfer network and aeronautical... More
Industry: Communication Equipment
Country: United States
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