Wed, Oct. 28, 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."
Wed, Oct. 28, 9:12 AM
Tue, Oct. 27, 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
Tue, Oct. 27, 5:41 PM
Tue, Oct. 27, 4:21 PM
Mon, Oct. 26, 5:35 PM
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Thu, Oct. 22, 3:57 PM
- Infinera (NASDAQ:INFN) has been a tech standout today after optical component vendor Oclaro pre-announced above-consensus calendar Q3 sales, while stating it saw "strong growth in our 100G product portfolio" and better-than-expected 10G/40G sales. The Nasdaq is up 1.5%.
- Infinera's Q3 report arrives on Oct. 27. 100G upgrades have been a major tailwind for the company's long-haul optical transport system sales. A 100G product line refresh (covered both metro and long-haul products) was announced earlier this month.
Wed, Oct. 7, 11:23 AM
- Though it opened nearly flat, Infinera (NASDAQ:INFN) has since nosedived on volume of 2.6M shares, well above a 3-month daily average of 1.8M.
- The selloff comes after the optical networking hardware vendor hosted its analyst day yesterday (webcast), during which it unveiled a product line refresh that included new DTN-X optical transport systems and an end-to-end metro/long-haul solution. William Blair and Needham have respectively reiterated Outperform and Hold ratings.
Tue, Oct. 6, 6:33 PM
- With Infinera's (NASDAQ:INFN) $300M+ acquisition of Swedish optical networking peer Transmode on the books, the company has rolled out an end-to-end solution pairing Infinera's bread-and-butter DTN-X long-haul optical transport systems with Transmode's TM-series packet-optical (integrated Ethernet/IP and optical networking) metro systems. The solution is enabled by new 100G modules for the DTN-X line that communicate with Transmode's gear.
- Infinera, which (unlike Transmode) has historically received the lion's share of its revenue from the long-haul market, has also unveiled two metro DTN-X platforms - the XTC-2 and XTC-2E - that combine 100G WDM transport with OTN switching in a metro-friendly footprint. Infinera's next-gen oPIC-100 photonic integrated circuit (PIC) is leveraged.
- Also launching: A new long-haul DTN-X platform (the XT-500) that uses the company's 500Gb/s PIC-500 PIC and supports the company's Instant Bandwidth rapid-provisioning solution.
- IHS' Andrew Schmitt: "Infinera can now address the entire WDM market - which we expect to top $15 billion by 2019 -- from the edge to the core and across both traditional service provider and internet content provider applications. Infinera and the DTN-X played a major role in the optical reboot from 10 Gb/s to 100 Gb/s in the long-haul core, and the company is well timed to enter the metro portion of the market, which we expect to surge in 2016,"
Fri, Sep. 11, 12:45 PM
- Finisar (FNSR -18.4%) has plunged to its lowest levels since 2012 after missing FQ1 estimates, providing soft FQ2 guidance, and announcing chairman Jerry Rawls is replacing Eitan Gertel as CEO.
- Optical component/module peers Alliance Fiber (AFOP -4.6%), Lumentum (LITE -2.3%), and Oclaro (OCLR -6%) are also off, as are equipment vendors Infinera (INFN -3.8%), Ciena (CIEN -2.8%), Adtran (ADTN -2.3%), and Calix (CALX -2.5%). The Nasdaq is nearly flat.
- During Finisar's earnings call (transcript), Rawls noted his company continues to "see a high level of competition," and is aiming to cut operating expenses to ~20% of revenue from FQ1's 21.8%. CFO Kurt Adzema mentioned wireless and legacy 100G datacom component sales were soft in FQ1, and that Finisar is now seeing "some lumpiness" for 40G data center sales.
- Adzema insisted the competition (much of it around low-end/10G products) is business as usual. "The lower end products always [face] competition from non-tier 1 companies and in some period of time, it just takes whether it’s a one year or a three year or whatever the period, tier 2 competitors always catch up." Rawls promised 25G/100G Ethernet data center upgrade cycles would drive growth next year.
- MKM and B. Riley have downgraded Finisar to Neutral, and several other firms have cut targets. MKM's Michael Genovese cites datacom competition/price pressure, and states he's "becoming less convinced that there is an easy path to industry consolidation that will help alleviate ... significant Optical component industry challenges,"
- At the same time, Genovese defends Ciena, Infinera, and Lumentum (formerly JDS Uniphase's component unit). "Ciena and Infinera actually slightly benefit from more [component] competition and lower prices since they are customers ... we believe the negative revisions in Finisar's outlook are much more on the Datacom side than on the Telecom side ... Finisar is an incumbent that derives 75% of overall revenues from Datacom, while Lumentum is a relatively new challenger with only 20% of revenues from Datacom ... we are much more confident in the demand and pricing environments for 100G Telecom (Metro and [long-haul]) components than we are for Datacom, and Lumentum has significantly more exposure to 100G Telecom than Finisar."
Tue, Sep. 8, 10:03 AM
- 5 months after downgrading to Neutral and 8 months after pulling the company from its Conviction Buy list, Goldman has downgraded Infinera (NASDAQ:INFN) to Sell, and cut its target by $5 to $19. Shares are selling off in the face of a 2% Nasdaq gain.
- Infinera remains up 39% YTD. The optical networking/switching hardware firm trades for 22x a 2016 EPS consensus of $0.95. 2015 and 2016 revenue growth consensus estimates are respectively at 28.1% and 24.6%.
- Update (11:15AM ET): Goldman's Doug Clark thinks gross margin will be flat to down next year due to metro, Cloud Xpress, and Transmode product ramps, leaving it 200bps below consensus estimates. "We believe Infinera remains well positioned to enter the 100G metro market, which will double its TAM and should support double digit revenue growth through at least 2017."
Fri, Sep. 4, 9:28 AM
- Deutsche has downgraded Ciena (NYSE:CIEN) to Hold after the company posted mixed FQ3 results. Shares have dropped to $22.46 premarket. Nasdaq futures are off 1.4%.
- Several firms provided positive reactions yesterday. Wells Fargo's Jess Lubert (Outperform rating): "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 confident in the company’s ability to deliver C2016 EPS of at least $1.70 following FQ3 results. As such, we would recommend investors take advantage of any weakness on Ciena’s softer than expected FQ3 sales results to buy the stock, which we believe remains attractively valued at less than 14X our C2016 EPS estimate."
- Prior Ciena coverage
- Update: Deutsche's Brian Modoff states checks point to weak U.S. telco and cable demand. "Our latest round of channel checks correlate well with color we gathered from our post call with CIEN on the potential for modest headwinds to carrier network upgrade activity at the US telcos and cablecos (outside of T; where CIEN is seeing strength in 100G metro and in broadband fiber access). Infinera (NASDAQ:INFN), we note, has revenue exposure at the major Web 2.0 and Cloud portals, ISPs, Telcos such as CenturyLink and a handful of cablecos, and “zero” exposure currently at T, Verizon Communications, etc. We therefore prefer INFN to play the double-digit intensity in 100G Datacenter Optical rollouts and 100G in the Metro and Long Haul during 2H15 and into FY16/17
Mon, Aug. 24, 4:29 PM
- The Nasdaq opened down 7.5%, furiously rallied almost to breakeven, and then sold off again in the afternoon to close down 3.8%. Some tech stocks managed to rise nonetheless, while many others posted 5%+ declines.
- Major decliners included Citrix (CTXS -9.3%), Solera (SLH -8.9%), NCR (NCR -7.8%), Nuance (NUAN -6.9%), Infinera (INFN -6.4%), HomeAway (AWAY -6.6%), MagnaChip (MX -6.4%), Yandex (YNDX -7.5%), Neustar (NSR -6%), Ebix (EBIX -7.3%), SGI (SGI -8%), Monster (MWW -7.5%), Silver Spring (SSNI -6.6%), Perion (PERI -11%), and Synchronoss (SNCR -7.5%).
- Solera's decline comes 4 days after the company confirmed it's exploring strategic alternatives, and 5 days after Bloomberg reported a sale is being explored. Yandex has been hit hard in recent weeks by the ruble and crude oil's decline. Infinera is down 20% over the last 3 trading days, albeit still up 34% YTD.
- See also: Morning decliners, Chinese tech stocks, large-cap decliners
Thu, Aug. 20, 12:09 PM
- With investors fleeing to safety and asking questions later - Chinese macro concerns have been playing a role - tech stocks with high betas (and sometimes also high multiples and big 2014/2015 gains) are among the biggest losers as the S&P drops 1.1%, and the Nasdaq 1.7%.
- Noteworthy decliners include action camera leader GoPro (GPRO -6%), security tech plays Palo Alto Networks (PANW -4.9%), FireEye (FEYE -4.5%), CyberArk (CYBR -5.7%), Qualys (QLYS -5.1%), Imperva (IMPV -6%), and Vasco (VDSI -4.2%), and driver-assistance tech leader Mobileye (MBLY -6%).
- Others include optical networking hardware vendors Ciena (CIEN -5%) and Infinera (INFN -7.3%), optical component vendors NeoPhotnics (NPTN -5.9%) and Oclaro (OCLR -6.7%), data management software firm Varonis (VRNS -5.5%), programmatic ad-buying platform Rocket Fuel (FUEL -7.4%), DNS/IP address hardware vendor Infoblox (BLOX -5.1%), haptic tech developer Immersion (IMMR -6.2%), and solar microinverter maker Enphase (ENPH -7.2%).
- Many Chinese tech stocks are also seeing heavy losses.
Fri, Aug. 14, 9:45 AM
- Four months after Infinera (INFN -1.5%) offered to buy Swedish optical networking hardware firm Transmode, the company states Transmode investors owning 95.8% of shares have accepted the offer. 90% support was needed for the deal to be approved.
- Based on the percentage of shares tendered under the cash/stock and cash-only payout options (63% and 37%, respectively), Infinera will issue 7.9M shares, and provide rest of the payout in cash. The deal was worth $351M when Infinera announced its original offer.
- Closing is expected on or around Aug. 20. Transmode stands to significantly increase Infinera's presence in the metro optical transport market - as of Q2, Infinera still received over 90% of its revenue from long-haul systems - as well as grow its European customer base.
Thu, Jul. 23, 2:56 PM
- Application delivery controller/security hardware vendor F5 (FFIV +6.9%) beat FQ3 estimates on the back of strong software sales, and provided above-consensus FQ4 EPS guidance (revenue was in-line). With growing 100G long-haul optical deployments serving as a tailwind, optical networking hardware vendor Infinera (INFN +9.6%) beat Q2 estimates and provided strong Q3 guidance.
- Also: Optical component vendor Alliance Fiber (AFOP +16%) beat estimates and offered healthy guidance. Strong datacom component demand from cloud service providers was cited.
- A slew of telecom/networking equipment, component, and chip vendors are higher on a day the Nasdaq is down 0.4%. The list includes Infinera rival Ciena (CIEN +1.6%), F5 rival Radware (RDWR +3.3%), and Alliance Fiber peer NeoPhotonics (NPTN +4.7%). Others include Ciena acquisition target Cyan (CYNI +1.8%) and chipmakers Cavium (CAVM +3.6%), PMC-Sierra (PMCS +3%), EZchip (EZCH +2.8%), and InPhi (IPHI +3.7%).
- Broader gains for chip stocks - the Philadelphia Semi Index is up 1.7% after selling off hard yesterday - are likely helping the chipmakers. Cisco, meanwhile, is up 2.2% after striking a deal to sell its share-losing set-top unit to Technicolor.
- During F5's earnings call, new CEO Manny Rivelo stated F5 now leads the virtual (software-based) ADC market, which has sometimes been seen as a major long-term threat to its ADC hardware business, and noted the company saw a 20% Y/Y increase in its deferred revenue balance (driven by services/subscription growth) to $743M. He also disclosed sales chief Dave Feringa is stepping down on Oct. 1; his successor will be named shortly.
- On Infinera's call, CEO Tom Fallon mentioned the company has now invoiced 12 customers for its new Cloud Xpress data center interconnect platform, up from 7 three months ago. For now, long-haul optical still makes up over 90% of revenue - Cloud Xpress growth, the pending launch of a metro aggregation product, and (provided it's approved) the Transmode acquisition should change that. 3 customers accounted for over 10% of Q2 revenue.
Infinera Corp provides optical transport networking equipment, software and software services to Tier 1 and Tier 2 telecommunications service providers, internet content providers, cable operators, wholesale & enterprise carriers and government entities.
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