Jun. 2, 2014, 4:43 PM
- Jefferies reports AT&T (T -0.1%) significantly cut its wireline capex starting last month.
- It thinks many companies could be affected, including equipment vendors Alcatel-Lucent (ALU -2.2%), Ciena (CIEN -3.9%), Juniper (JNPR +0.2%), and Adtran (ADTN -5.1%), and component vendors JDS Uniphase (JDSU -2%) and Finisar (FNSR -0.7%).
- As its is, AT&T's 2014 capex budget ($21B) is down $200M from 2013's spending level. Moreover, the carrier's huge mobile infrastructure needs and the DirecTV deal could be motivating it to cut wireline spend.
- Also: AT&T may be looking to keep capex down ahead of the full rollout of Domain 2.0, an initiative meant to improve network flexibility, lower costs, and cut provisioning times through the embrace of software-defined networking (SDN) and network functions virtualization (NFV).
- MKM has argued Domain 2.0 will be a negative for Cisco, but a positive for Ciena and Finisar, among others.
May 27, 2014, 5:16 PM
- JDS Uniphase's (JDSU) buyback is good for repurchasing 3.9% of shares at current levels. The company had $926.2M in cash to help pay for capital returns as of March 29.
- The announcement comes with shares within striking distance of a 52-week low of $10.29. They dove a month ago due to an FQ3 miss and soft FQ4 guidance.
May 14, 2014, 5:44 PM
- Cisco's FQ3 beat, above-consensus FQ4 guidance,, and positive CC commentary are providing a lift to networking equipment rivals and component suppliers.
- Up AH: ALU +1%. JNPR +1.6%. FFIV +0.8%. FNSR +2%. JDSU +1.5%. RVBD +0.9%. JBL (a major Cisco contract manufacturer) +0.8%.
- Cisco's product orders were nearly flat Y/Y in FQ3 after falling 4% in FQ2. U.S. orders (+7%, with 10%+ increases in enterprise/SMB orders) provided a boost, as did a 4% increase in Northern European orders.
- The company's service provider orders fell another 5% Y/Y (router/set-top share loss), but that was better than FQ2's 12% drop. Emerging markets (-7% vs -3% in FQ2) also remained weak.
May 1, 2014, 9:13 AM
Apr. 30, 2014, 5:40 PM
Apr. 30, 2014, 5:09 PM
- In addition to missing FQ3 estimates, JDS Uniphase (JDSU -6.9% AH) is guiding for FQ4 revenue of $425M-$445M and EPS of $0.10-$0.14, below a consensus of $459M and $0.17.
- The company blames its FQ3 miss on "later-than-expected carrier orders." Optical communications product sales grew 7.1% Y/Y, slower than FQ2's 12.1% clip. Network and service enablement (test equipment) sales fell 1.1% after declining 0.2% in FQ2.
- Peer Oplink (OPLK -6.7% AH) also posted an FQ3 miss, while adding it's seeing "a bit of softness" in its optical business. FQ4 guidance is for revenue of $48M-$52M and EPS of $0.05-$0.11, below a consensus of $53.3M and $0.17.
- Finisar (FNSR) is down 1.1% AH. Others that might slip: OCLR, AFOP, NPTN, FN.
Apr. 30, 2014, 4:07 PM
Apr. 29, 2014, 5:35 PM
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Apr. 2, 2014, 9:52 AM
- Alliance Fiber (AFOP +13.8%) expects to report Q1 revenue of $24.8M, +104% Y/Y and soundly above prior guidance of $22.5M (it's also the consensus).
- The announcement comes less than two months after shares tumbled due to a Q4 miss. Full Q1 results arrive on April 24.
- Needham's bullish March 25 coverage launch was well-timed. In general, Street sentiment towards optical component and networking hardware vendors has been improving, thanks in part to strong numbers from Ciena and Infinera.
- Optical component peers are trading moderately higher: FNSR +2.3%. JDSU +1.3%. NPTN +1.6%. OCLR +2.6%.
Mar. 28, 2014, 9:50 AM
- InvenSense (INVN +3%) has been upgraded to Buy by Roth.
- Ciena (CIEN -1.4%) and JDS Uniphase (JDSU -0.4%) have been cut to Sector Perform by RBC. MKM upgraded JDS a week ago.
- Veeco (VECO +4.6%) has been upgraded to Buy by CLSA. UBS upgraded shares earlier in March.
- Avago (AVGO +1.9%) has been started at Outperform by Pac Crest.
- Telecom Italia (TI +2.2%) has been upgraded to Buy by Berenberg.
- Integrated Silicon (ISSI +3.4%) has been started at Buy by B. Riley.
Mar. 21, 2014, 9:43 AM
Mar. 12, 2014, 6:38 PM
- Goldman's upgrades of Infinera (INFN +14.9%) and Calix (CALX +2.8%) wound up sparking a broader rally telecom equipment and optical component makers. Notable gainers: FNSR +6.2%. UBNT +6.7%. CYNI +5.1%. CIEN +3.8%. JDSU +5.4%. AFOP +3.4%. NPTN +3.4%. ADTN +2.8%. FN +2.2%.
- Goldman's Simona Jankowski believes Infinera, which recently lost a major Verizon deal to Alcatel-Lucent, has regained Level 3 as a client. She also estimates 100G optical system shipments "have approximately a 15% point gross margin advantage" relative to 10G counterparts, and sees this delta boosting Infinera's margins as 100G "increases from mid-50% of total product revenue in 2013 to mid-70% in 2014."
- Regarding Calix, Jankowski reports seeing better spending trends among the tier 2/3 carriers the company leans heavily on, and thinks 2014/2015 estimates now "more accurately reflect" Calix's growth trajectory.
- Today's gains come as the optical networking industry's OFC 2014 conference continues. As usual, the conference has seen a slew of product launches. Ciena has followed Infinera (previous) in launching software tools for intelligently controlling a network's optical layers, and JDS Uniphase is showing off several new components and modules.
Jan. 31, 2014, 1:56 PM
- With help from an upgrade to Outperform from William Blair, JDS Uniphase (JDSU +6.9%) is shooting higher following its FQ2 beat, which was accompanied by strong FQ3 guidance and news of two acquisitions.
- Optical component peers Finisar (FNSR +4.5%), Oclaro (OCLR +5.7%), and NeoPhotonics (NPTN +6.5%) are following JDS higher. The fact JDS' optical communications product sales rose 12.1% Y/Y (up from 8.1% in FQ1) is likely going over well.
- Blair's Dmitry Netis is upbeat about JDS' improving carrier test equipment/software business: He expects it will return to positive growth in FQ3 after years of declines, grow 2.5% in FY14 (ends in June), and grow 9% in FY15.
- MKM (Neutral, PT upped to $15 from $13) observes rising 100G optical component demand (previous) is giving JDS a lift; Finisar and NeoPhotonics also have solid 100G exposure.
- Barclays is pleased FQ3 revenue is expected to grow 6% excluding a gesture recognition business affected by Xbox One/Kinect seasonality, but nonetheless considers Finisar a better investment due to its "cleaner" datacom exposure.
- CC transcript
Jan. 31, 2014, 9:09 AM
Jan. 30, 2014, 5:21 PM
- JDS Uniphase (JDSU) expects FQ3 revenue of $420M-$440M vs. a consensus of $425.9M.
- JDS also announces it's acquiring the assets of Trendium, a developer of analytics and customer experience optimization software for mobile carriers, and Time-Bandwidth Products, a maker of high-power lasers for industrial/scientific markets. Terms are undisclosed.
- Look for JDS to cross-sell Trendium's products to carrier test equipment customers. Carrier interest in advanced mobile analytics solutions has been growing in tandem with the mobile data/app boom. IBM made an acquisition in this space three months ago.
- JDS' FQ2 beat was driven in part by a gross margin of 48.5%, +220 bps Q/Q and +50 bps Y/Y. Optical communications product sales (39% of revenue) rose 12.1% Y/Y, and commercial optical sales (44% of revenue) 6.6%.
Jan. 30, 2014, 4:19 PM
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Viavi Solutions Incisa provider of network and service enablement solutions and optical products for telecommunications service providers, wireless operators, cable operators, network-equipment manufacturers and enterprises.
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