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Wed, Jan. 27, 12:59 PM
- Microcap fiber access equipment maker Zhone (NASDAQ:ZHNE) has rallied after beating Q4 estimates and guiding on its earnings call (transcript) for 2016 revenue to be up by a mid-single digit % - for reference, sales fell 20% in Q4, and 16% in 2015. Q1 revenue is expected to be down slightly Q/Q due to seasonality.
- Zhone sees the deployment of its MXK-F platform by major carriers providing a 2016 lift. It also expects to benefit from an improved spending environment among international carriers - international customers were 57% of Q4 revenue, down from 67% in Q2 - as well as FCC CAF-2 funding and continued strength for Zhone's FiberLAN platform.
- Zhone's Q4 results, earnings release
Tue, Jan. 26, 4:20 PM
Oct. 15, 2015, 4:21 PM
- Zhone (NASDAQ:ZHNE): Q3 EPS of -$0.04 beats by $0.01.
- Revenue of $22.1M (-24.9% Y/Y) beats by $0.11M.
Jul. 22, 2015, 4:19 PM
- Zhone (NASDAQ:ZHNE): Q2 EPS of -$0.01 beats by $0.01.
- Revenue of $27.5M (-15.2% Y/Y) misses by $0.71M.
Apr. 22, 2015, 12:17 AM
- "[W]e expect second quarter revenue to grow in the mid-single-digit percentage range from the first quarter and continue to grow sequentially for the remainder of the year," Zhone (NASDAQ:ZHNE) CFO Kirk Misaka stated on the Q1 CC (transcript). While the sole Q2 analyst estimate forecasts nearly 10% Q/Q sales growth (to $29.8M), the sole full-year estimate forecasts only 1.5% Y/Y sales growth (to $122.4M).
- Also: CEO Jim Norrod stated Zhone expects to return to profitability in Q2, and be profitable for the whole of 2015. The sole Q2 analyst EPS estimate is at -$0.03, and the sole full-year estimate at -$0.11.
- Full-year growth is expected to be driven by the launch of Zhone's MXKF fiber access concentrator (part of the MXK series, offers a 10x increase in switching capacity and 2x increase in port capacity), continued growth for the company's FiberLAN GPON optical LAN hardware, and international expansion.
- Contributing to the Q1 EPS beat: 1) Gross margin came in at 37.5%, -50 bps Y/Y but topping guidance of 34%-36%. 2) Operating expenses rose just 2% Y/Y to $10.7M, beating guidance of $11M-$11.5M. Q2 GM and opex guidance is respectively at 34%-36% and $10.5M-$11M.
- Shares rose to $1.70 in AH trading, hitting their highest levels since January.
- Q1 results, PR
Apr. 21, 2015, 4:16 PM
- Zhone (NASDAQ:ZHNE): Q1 EPS of -$0.02 beats by $0.05.
- Revenue of $27.1M (-5.3% Y/Y) in-line.
Jan. 28, 2015, 11:57 AM
- Zhone (ZHNE +1.4%) guided on its Q4 CC (transcript) for revenue to fall ~10% Q/Q in Q1, and then grow sequentially throughout 2015. That implies Q1 revenue of $27.1M, slightly below a sole analyst estimate of $28M. Operating expenses ($11.3M in Q4) are expected to stay in an $11M-$11.5M range in Q1, before falling by ~$1M in Q2 thanks to Zhone's restructuring.
- The fiber access equipment maker added it's "looking forward to returning to profitability" in 2015; the sole 2015 EPS estimate is at $0.03. It talked up the potential of its new MXKF access concentrator, and reiterated it thinks its FiberLAN enterprise optical LAN offerings can be a $100M/year business in five years.
- Zhone had three 10%+ customers in Q4 (all international), up from two in Q3. Its cash balance fell by $2M Q/Q to $11.5M. Shares were initially up sharply, but have pared their gains.
- Q4 results, PR
Jan. 27, 2015, 4:26 PM
- Zhone (NASDAQ:ZHNE): Q4 GAAP EPS of -$0.06
- Revenue of $30.1M (-6.8% Y/Y) misses by $0.8M.
Oct. 16, 2014, 1:07 PM
- Zhone (NASDAQ:ZHNE) guided on its Q3 CC (transcript) for Q4 revenue to rise by a mid-single digit % Q/Q; the sole analyst estimate is for revenue to rise 8% to $31.7M.
- The telecom equipment maker also said it expects its gross margin to fall to 33%-35% from a Q3 level of 36.5% (near the high end of a 35%-37% guidance range).
- Shares made a fresh 52-week low of $2.00 earlier today. Zhone issued a Q3 warning two weeks ago, and announced a CEO change in July.
Oct. 15, 2014, 4:18 PM
- Zhone (NASDAQ:ZHNE): Q3 GAAP EPS of -$0.08.
- Revenue of $29.4M (-6.7% Y/Y).
Oct. 15, 2014, 4:07 PM
- In an encouraging sign for beaten-down telecom equipment and chip/component stocks, Adtran (ADTN +5.7%) managed to rally even though it guided on its Q3 CC (transcript) for a low-to-mid teens Q/Q revenue drop. Consensus (doesn't appear to have fully accounted for Adtran's Q3 warning) was for revenue to drop 2% to $154.9M in Q4.
- Adtran attributed much of its Q3 weakness to "a decline in Europe as a large project there had a seasonal slowdown." Enterprise softness also took a toll.
- The company "[expects] to see an upturn in this business" in 2015, but European sales are expected to remain soft in Q4. Other equipment vendors, such as Juniper (JNPR +2%) and Ciena (CIEN +2.7%), have provided weak guidance blamed on U.S. wireline capex; AT&T is generally seen as a big culprit.
- In addition to Juniper and Ciena, many other industry names have closed with healthy gains. PKT +6.3%. INFN +3.4%. ZHNE +6.7%. ALLT +5.2%. AFOP +4.5%. AMCC +12.5%. CYNI +4%. CALX +3.3%. FNSR +3.1%. UBNT +4.2%. OPLK +3.4%. RKUS +3.3%.
Oct. 6, 2014, 11:30 AM
- EZchip (EZCH -12.5%), a top supplier of network processors for edge/access routers, now expects Q3 revenue of $19M, below prior guidance of $22M and a $22.6M consensus.
- CEO Eli Fruchter: "We have seen weakness in orders as well as inventory adjustments across most of our key customers that are serving the carrier networking equipment space. We believe this is a temporary slowdown, caused primarily by a weaker carrier spending environment that the market is currently going through." Like others, he's optimistic growth will soon pick up.
- Fruchter's remarks echo those from Cisco (EZchip's top customer), Juniper, Ciena, Finisar, JDS Uniphase, and several other firms. Soft North American wireline capex (led by AT&T) has especially been taking a toll on the industry.
- Several telecom equipment and component/chip suppliers are following EZchip lower. CIEN -2.8%. CAVM -2.8%. OCLR -2.7%. ZHNE -2.7%. CYNI -3.1%. AFOP -2.1%. NPTN -2.4%. OPLK -1.7%.
Oct. 2, 2014, 4:55 PM
- Zhone (NASDAQ:ZHNE) now expects Q3 revenue of $29M-$30M. That's below prior guidance for a low-single digit % increase from a Q2 level of $32.4M, and a sole analyst estimate of $33.3M.
- Gross margin is expected to be "near the upper end" of a 35%-37% guidance range. But opex is expected to be ~$2M above guidance of $11.5M, due to costs related to Zhone's CEO transition and restructuring. Full Q3 results arrive on Oct. 15.
- Many other telecom equipment vendors have also been having a rough time. Weak North American wireline capex has typically been the culprit.
Aug. 14, 2014, 12:40 PM
- Six firms have hiked their Cisco (CSCO -2.8%) targets after the company beat FQ4 estimates, issued mixed FQ1 guidance, and announced plans to cut another 6K jobs. But that isn't stopping shares from selling off due to worries about weak demand from carriers (orders -11% Y/Y) and emerging markets (orders -9%).
- "Notwithstanding the fact that capex will be fairly weak in [2H14], Cisco's [carrier] order performance in the first calendar half of 2014 demonstrates meaningful share loss in addition to soft carrier spending," says MKM (Neutral).
- Nonetheless, the firm thinks Cisco's total orders will rise at or near a low double-digit % in FQ1 (favorable comps will help). "We still believe it is profitable to own Cisco when orders and revenue growth are accelerating."
- Bulls are focusing on healthy enterprise orders and strong early uptake for the Nexus 9000/ACI SDN and networking virtualization platform. John Chambers mentioned on the CC (transcript) the platform's customer count more than tripled in FQ4 to 580+, and that there are over 60 customers for the related APIC software controller (just launched).
- Several peers and suppliers with strong carrier exposure are selling off. Cisco's numbers follow a soft outlook from JDS Uniphase, and coincide with light guidance from Oclaro. ALU -1.6%. JNPR -1.8%. FN -7.4%. ZHNE -2.1%. EZCH -3.8%.
- Prior Cisco earnings coverage
Jul. 23, 2014, 1:45 PM
- Juniper's (JNPR -9.8%) soft Q3 guidance, along with its related commentary on U.S. telco demand, is taking a toll on fellow telecom equipment suppliers Cisco (CSCO -1.2%), Ciena (CIEN -3.2%), Cyan (CYNI -2.5%), Zhone (ZHNE -6.5%) Ruckus (RKUS -1.6%), and Sonus (SONS -3.8%).
- Optical component vendors JDS Uniphase (JDSU -2.9%) and Finisar (FNSR -2%) are also off, as are several chipmakers (previous) with heavy networking/telecom exposure.
- On its CC (transcript), Juniper stated "market dynamics including M&A activity" are affecting the "sequencing and timing" of U.S. carrier projects. Jefferies reported in June AT&T has significantly cut its wireline capex in the wake of the DirecTV deal.
- There has been speculation AT&T is keeping a lid on wireline capex ahead of the full rollout of its ambitious Domain 2.0 initiative, which will feature the launch of software-defined networking (SDN) and network functions virtualization (NFV) platforms.
- Juniper insists it remains well-positioned with the aforementioned U.S. carriers, and that it has "major design wins" for next-gen projects. The company adds demand remains healthy with U.S. federal, cable, and Internet clients.
- The company's router revenue rose 7% Y/Y in Q2 to $617.8M, and its switch revenue rose 25% to $199.8M. Security product revenue fell 8% to $111.6M. The Junos Pulse VPN software ops (about to be sold for $250M) contributed $31.4M in revenue ($15.9M product, $15.5M service).
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