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.
Thu, Jun. 4, 2:07 PM
- Though the Nasdaq is down 1%, Ciena (CIEN +1.4%) remains higher after beating FQ2 estimates on the back of strong packet-optical (integrated Ethernet/optical networking) hardware sales. FQ3 revenue guidance is at $610M-$640M, in-line with a $632.2M consensus.
- Financials: Boosting FQ2 EPS: Gross margin was 44.4%, +30 bps Q/Q and +130 bps Y/Y, and above guidance of 42%-43%; FQ3 GM guidance is at 43%. Also helping: Operating expenses (non-GAAP) only rose by $1.6M Y/Y (less than 1%) to $207.9M. On a GAAP basis, R&D spend totaled $105.2M, sales/marketing $82.5M, and G&A $30.3M. Adjusted op. margin rose to 10.9% from 6.8% in FQ1 and 6.2% a year ago.
- Business performance: Converged packet optical revenue (69.6% of total) +21% Y/Y to $432.9M. Packet networking (Ethernet switches) -20% to $53.3M. Optical transport -44% to $16.5M. Software/services +11% to $118.9M.
- Georgaphic/customer performance: North America was 63.9% of revenue (U.S. was 59.1%), EMEA 16.4%, Asia-Pac 12%, and Caribbean/Latin America 7.7%. AT&T accounted for 19% of sales, and was the sole 10%+ customer. UBS likes the fact North American sales rose 20% Q/Q in spite of AT&T revenue (recently under pressure) remaining roughly flat.
- Shares made a new 52-week high of $25.49 this morning before pulling back a bit.
- FQ2 results, PR
Thu, Jun. 4, 7:01 AM
Wed, Jun. 3, 5:30 PM
Wed, May 27, 4:38 AM
- As the telecom-network industry consolidates, Ericsson (NASDAQ:ERIC) is now more open to a bigger M&A deal in order to remain competitive in the market, Bloomberg reports.
- "I see no reason why we, given the right preconditions, would exclude a larger deal," Ericsson Chairman Leif Johansson said in an interview this month. "But as you know, there aren't that many left."
- CEO Hans Vestberg plans to gather with his top managers in June to discuss strategy, and a key area is what the company can do to counter Nokia's recent $16.6B acquisition of Alcatel-Lucent.
- Possible targets: Ciena (NYSE:CIEN), Infinera (NASDAQ:INFN) and Juniper (NYSE:JNPR)
Wed, May 20, 1:30 PM
- MKM's Michael Genovese has hiked his Ciena (CIEN +1.4%) target by $2 to $27 ahead of the company's June 4 FQ2 report. Shares have made fresh 52-week highs.
- Genovese: "We are positive on CIEN because demand for 100G Optical capacity is strong and broad-based across Internet, Cable and Tier 2 carrier customers. Ciena is also seeing good growth in Europe from better distribution. Overall revenue growth should accelerate in FY16 as U.S. Tier 1 demand improves. We also expect [operating margins] to expand in FY15-FY16 to normalized low-double-digit levels."
- The upgrade comes two weeks after Ciena struck a $400M deal ($335M net of cash) to buy carrier SDN software vendor and metro packet-optical hardware rival Cyan (CYNI +1.4%). The deal was widely seen as being software-focused - Wells Fargo argued the advanced software orchestration features of Cyan's Blue Planet SDN platform could help Ciena "capitalize on rising customer demand for open, programmable, and virtualized network architectures over the next several years."
- With Ciena set to given Cyan shareholders consideration equal to 0.224 Ciena shares (89% in stock, 11% in cash), Cyan is following Ciena higher.
Mon, May 4, 7:56 AM
- Cyan (NYSE:CYNI) +29.8% premarket after Ciena (NYSE:CIEN) agrees to acquire the networking software company in a cash and stock deal valued at ~$400M; the $4.75/share bid is a 30% premium to CYNI's Friday closing price.
- Ciena says the addition of Cyan "accelerates the availability of a complete solution for our customers to deliver virtualized networks and services on-demand."
- CYNI's stock had run up 46% YTD through Friday.
- Also: Cyan beats by $0.01, beats on revenue
Tue, Apr. 14, 10:17 AM
- Optical networking hardware vendors Ciena (CIEN +5.7%) and Infinera (INFN +2.4%) are higher after Nokia stated it's in talks to merge with Alcatel-Lucent, sparking hopes more telecom equipment industry M&A could be on tap. Microcaps MRV Communications (MRVC +9.7%) and Zhone (ZHNE +6.9%) are also faring well.
- Ciena and Infinera both compete against Alcatel in the optical transport/switching market. The Street might be betting Ericsson or another rival will respond to a Nokia/Alcatel deal by making an optical acquisition.
- Infinera (rallying less than Ciena) is a week removed from making a $350M+ bid for Swedish metro optical hardware vendor Transmode. Analyst reactions to the deal, which stands to significantly increase Infinera's metro market reach and European customer base, have been fairly positive
Fri, Mar. 27, 3:12 PM
- Today's notable tech gainers include next-gen firewall leader Palo Alto Networks (PANW +3.5%), touchscreen tech developer UniPixel (UNXL +5.9%), solar microinverter leader Enphase (ENPH +5.8%), optical transport/switching hardware vendor Infinera (INFN +3.8%), telecom service/analytics provider Neustar (NSR +4.4%), and Chinese online classifieds leader 58.com (WUBA +4%). The Nasdaq is up 0.3%
- There are relatively few major decliners today. The group includes Infinera rival Ciena (CIEN -4.5%), Chinese sports lottery site 500.com (WBAI -5.3%), and Chinese online video leader Youku (YOKU -3.4%).
- Palo Alto is adding to Thursday gains seen amid a broader cybersecurity stock rally. Likewise, Enphase gained on Thursday following rival SolarEdge's IPO, Neustar gained after announcing a $150M buyback, and Infinera gained following a bullish MKM note.
- Ciena is reversing the Tuesday gains seen after Stifel reported the company's share of a major Verizon 100G metro contract (has been officially announced) could be larger than expected. 500.com is giving back major Thursday gains; yesterday morning, SA Instablog author/former i-banker MNS Global reported hearing Chinese authorities are thinking of indefinitely extending recently-placed bans on online sports lottery sales, after uncovering corruption.
- Previously covered: EMC, HP, Voxeljet, Skyworks, SuperCom, Stratasys, Qunar, Pandora, SanDisk
Tue, Mar. 24, 11:29 AM
- Like others, Stifel reports Ciena (NYSE:CIEN) and Cisco (NASDAQ:CSCO) are expected to share a huge Verizon 100G metro optical contract. However, while others have reported Cisco will get ~2/3 of the contract, Stifel's checks indicate the Cisco/Ciena split hasn't been determined; the firm believes "both vendors will start on an equal footing," and that Ciena might even get a majority of the deal.
- Ciena is expected to supply a platform that's similar to its 6500 series packet-optical (integrated Ethernet switching/optical networking) hardware, and which supports OTN switching. Stifel thinks Ciena, whose 6500 series is already used in Verizon's 100G long-haul network, could get over $100M in 2016 revenue from the metro deal. Cowen has estimated the total contract opportunity could be worth $200M-$300M over two years.
- Optical component vendor NeoPhotonics (NPTN +4%), which received 15% of its 2014 revenue from Ciena (trailing only Huawei's 38%) and has healthy 100G exposure, is also rallying. Its shares are now up 104% since a Q4 beat was posted on March 3.
- Update: Verizon has confirmed Ciena and Cisco have won the deal. No word on the split between the companies.
Mon, Mar. 16, 3:19 PM
- Though the Nasdaq is up 1.1%, major tech decliners are roughly on par with major gainers today.
- Notable gainers include telecom equipment vendor Ciena (CIEN +3.9%), data center owner CyrusOne (CONE +4.6%), optical component maker NeoPhotonics (NPTN +6.1%), software outsourcing firm Luxoft (LXFT +7.7%), supply chain software vendor Manhattan Associates (MANH +4.2%), and Chinese game developer NetEase (NTES +3.7%).
- Notable decliners include leading Chinese online video platform Youku (YOKU -4%), 4G router/M2M module maker Novatel (MIFI -5.5%), security hardware/software vendor KEYW Holding (KEYW -5.3%), Chinese online retailer LightInTheBox (LITB -8.7%), Chinese online real estate plays E-House (EJ -4.7%) and Leju (LEJU -5.3%), seismic tech provider Geospace (GEOS -7.5%), and U.S. solar installer Vivint (VSLR -4.3%).
- CyrusOne, Luxoft, and Manhattan Associates are making new 52-week highs. Geospace's decline comes as crude oil falls to fresh 6-year lows. The Chinese decliners are failing to get a boost from pro-stimulus remarks from premier Li Keqiang (they've lifted many other Chinese names).
- Previously covered: Xilinx, Neonode, MoSys, Superconductor Technologies, Himax, Alibaba, Avago, Qorvo, King Digital, iDreamSky, MicroVision
Thu, Mar. 5, 6:33 PM
- Though Ciena (NYSE:CIEN) soundly missed FQ1 revenue estimates, it's guiding for FQ2 revenue of $585M-$615M, in-line with a $597.2M consensus. Meanwhile, EPS beat estimates thanks to a 620 bps Q/Q and 70 bps Y/Y increase in gross margin to 44.1% (favorable to guidance for a low-40s GM).
- FY15 (ends Oct. '15) revenue growth guidance is now at 5%, below a 7.9% consensus. However, guidance would still be at 7%-9% if not for forex.
- Investors took the numbers in stride; Ciena closed up 0.2%. However, shares are up 1.7% AH thanks to optical component supplier Finisar's strong April quarter guidance.
- On the CC (transcript), the FQ1 sales miss was blamed on both forex and the timing of U.S. federal orders - they're now expected to arrive in FQ2 and FQ3. The gross margin growth was attributed to cost cuts and a mix shift towards software and "certain kinds of metro [systems] where you’ve got high packet and switching capabilities built into the platform." FQ2 GM guidance is at 42%-43%.
- Also: CEO Gary B. Smith stated Ciena thinks it's "very well placed" to win a major Verizon contract for a 100G metro optical buildout, and that it expects a decision soon. In December, Cowen predicted Ciena would be one of two suppliers, and that the deal could be worth $200M-$300M over two years.
- Packet networking (Ethernet switch) and software/services revenue saw healthy Y/Y growth in FQ1; converged packet optical (integrated Ethernet/optical systems, 63.6% of revenue) grew slightly, and optical transport (now just 4% of revenue) fell sharply. Operating expenses fell 1% Y/Y to $199.8M.
- FQ1 results, PR
Thu, Mar. 5, 7:03 AM
Wed, Mar. 4, 5:30 PM
Fri, Jan. 30, 2:56 PM
- Optical networking/carrier Ethernet hardware vendor Ciena (CIEN -4%), optical component suppliers Finisar (FNSR -2.4%) and Oclaro (OCLR -2%), and telecom chipmakers AppliedMicro (AMCC -5.9%) and Cavium (CAVM -4.4%) are all off after component vendor JDS Uniphase (JDSU -7.4%) missed FQ2 estimates and provided soft FQ3 guidance.
- On its CC (transcript), JDS observed its FQ2 network enablement (test equipment) and service enablement (telecom software/services) revenue fell a combined 8% Y/Y due to "weaker carrier spending and no budget flush in historically stronger December quarter." Network enablement is expected to remain soft in seasonally weak FQ3 as customers weigh their 2015 spending plans. Service enablement is expected to grow ~24%, after growing 16.6% in FQ2.
- AppliedMicro is down 10% since providing a soft FQ4 EPS guidance (-$0.09 vs. a -$0.07 pre-earnings consensus) on Tuesday afternoon to go with an FQ3 beat. Cavium is giving back the gains it saw yesterday after beating Q4 estimates and providing strong Q1 guidance.
Fri, Jan. 23, 10:32 AM
- Infinera (INFN +17.7%) knocked the cover off the ball yesterday afternoon, soundly beating Q4 estimates and issuing strong Q1 guidance on the back of growing demand for its DTN-X optical transmission/switching platform for 100G deployments.
- Rival Ciena (CIEN +3.7%) and optical component vendors JDS Uniphase (JDSU +2.7%) and Finisar (FNSR +2.3%) are rallying in response. The companies followed equity markets higher yesterday after Verizon guided for its 2015 capex to be slightly above 2014 levels (contrasts with AT&T's planed capex cut).
- On its CC (transcript), Infinera said it added 10 new invoiced DTN-X customers in Q4 (3 new to Infinera altogether), raising its total to 59, and that nearly half of all DTN-X clients are now opting for the company's Instant Bandwidth rapid provisioning tech. Initial revenue for the Cloud Xpress point-to-point interconnect platform was received in December, and 8 customer commitments have been received to date.
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