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.
Wed, Jan. 7, 12:45 PM
Wed, Jan. 7, 9:58 AM
- Cyan (NYSE:CYNI) now expects Q4 revenue of $30M-$31M, well above prior guidance of $24M-$26M and a $25.1M consensus.
- The hike is attributed to "strong demand for [Cyan's] Z-Series packet-optical hardware," which provides integrated optical transmission, switching, and Ethernet functionality, for both "metro and regional 100G and packet applications." Cyan also reiterates its expectation to "convert some of [its] SDN and NFV trials into wins" in 1H15.
- The company was hit hard in 2013/2014 by soft orders from top customer Windstream, as well as a broader slowdown in North American wireline capex.
- Full Q4 results are due on Feb. 18. Deep packet inspection hardware vendor Procera has also hiked its guidance this morning.
Dec. 24, 2014, 2:40 PM
Dec. 23, 2014, 1:13 PM
- Cowen's Paul Silverstein believes Verizon will likely select Ciena (CIEN +1.9%) to be a supplier for its upcoming 100G metro optical buildout.
- Though 100G is increasingly a part of long-haul network upgrades, metro investments are still in their early stages. Verizon stated earlier this year Fujitsu and Tellabs would be among its 100G metro suppliers.
- Soft demand from North American carriers has been taking a toll on Ciena and many others. Verizon announced last week it has used Ciena's WaveLogic photonic systems to provision its first 200G ultra-long-haul link.
- Update: Silverstein thinks Ciena will be "one of the two key suppliers" for Verizon's buildout, and that a deal could be worth $200M-$300M over two years. "To be clear, our checks indicate that Verizon has not selected vendors for this 100Gbps metro optical build-out. That said, our checks also indicate that Ciena currently is well in front of the pack..."
Dec. 11, 2014, 9:25 AM
- Though Ciena (NYSE:CIEN) missed FQ4 EPS estimates (while slightly beating on revenue) and offered FQ1 EPS guidance ($540M-$570M) that was below a $566.6M consensus at the midpoint, it guided on its CC for 7%-9% FY15 (ends Oct. '15) revenue growth; consensus is at 7.1%.
- Also: Gross margin is expected to rebound to the low-40s range in FQ1 after falling 640 bps Q/Q and 290 bps Y/Y in FQ4 to 37.9%. Longer-term, Ciena expects GM to return to the low-to-mid 40s range.
- Helping Ciena's cause today: Shares were down 29% YTD going into earnings, thanks to worries about weak telecom capex and the margin pressure caused by "up-front incentives" provided to AT&T for its huge Domain 2.0 initiative.
- Ciena has been trying to lower its dependence on AT&T and other major telcos: "Non-carrier infrastructure" firms (including Internet companies) now make up more than 30% of revenue, and are expected to continue growing their revenue share.
- FQ4 results, details
Dec. 11, 2014, 7:50 AM
- FQ4 adjusted net loss of $8.2M or $0.08 per share vs. profit of $18.3M or $0.16 one year earlier.
- Adjusted gross margin of 37.9% vs. 40.8% a year ago.
- Converged Packet Optical revenue of $383.3M vs. $350.9M a year ago.
- Packet Networking revenue of $56.4M vs. $61.2M.
- Optical Transport revenue of $26.5M vs. $52.6M.
- Software and Services revenue of $124.8M vs. $118.7M.
- FQ1 revenue expected at $540M-$570M, with adjusted gross margin in the low 40s range, and adjusted operating expense of about $210M.
- Conference call at 8:30 ET
- Previously: Ciena misses by $0.21, beats on revenue
- CIEN -2.7% premarket
Dec. 11, 2014, 7:03 AM
Dec. 10, 2014, 5:30 PM
Dec. 9, 2014, 1:52 PM
- Verizon CFO Fran Shammo has promised his company will continue growing wireless capex (albeit while cutting wireline capex) to keep up with data traffic growth. Small cells and smart antennas were mentioned as areas of interest.
- The remarks have been well-received by investors in telecom equipment and component/chip vendors, many of whom have been hit hard by soft North American and (to an extent) European spending. The Nasdaq is up 0.3%.
- Gainers: JDSU +3.6%. FNSR +3.1%. CYNI +10.1%. INFN +2.8%. CIEN +1.9%. AMCC +3.7%. PMCS +3.7%. ZHNE +3%. OCLR +5.4%. AFOP +2.8%. ADTN +2.5%. UBNT +2.2%. XXIA +1.7%. CALX +3.5%. EZCH +2.9%. SONS +2.4%. Sonus is also benefiting from a bullish Wedbush coverage launch.
- The group was pummeled in November after AT&T set a 2015 capex budget of $18B, down from 2014's $21B.
Dec. 5, 2014, 10:34 AM
- Cyan's (NYSE:CYNI) $50M offering offering of convertible senior notes due 2019 carries an interest rate of 8%, and comes with warrants to buy 11.25M shares. The company has an option to issue another $10M worth of notes and related warrants within 13 days of the issuance date.
- The notes feature a conversion price of $2.44/share, and the warrants an exercise price of $3.62/share. Cyan closed at $2.07 yesterday, and was at $2.45 before announcing the offering on Wednesday morning.
- Net proceeds are expected to total $46.6M.
Dec. 3, 2014, 12:11 PM
Dec. 3, 2014, 9:16 AM
- Cyan (NYSE:CYNI) plans to offer $50M worth of convertible senior notes due 2019, and related warrants. An option to issue another $10M exists. The warrants will be exercisable on or after Jan. 15, 2016, and expire on Dec. 15, 2017.
- The optical networking hardware/SDN software vendor had $28.9M in cash and marketable securities at the end of Q3, down from $64.1M at the beginning of the year. Term loans totaled $3.8M.
- With Cyan having a market cap of just $115.5M as of yesterday's close, the offering could prove very dilutive.
Nov. 20, 2014, 1:38 PM
- Optical networking hardware vendors and their component suppliers are turning in a good day. The gains come a day after component vendor Oplink announced it's being acquired by Koch Industries for $445M, and will be managed by connector maker Molex (a Koch subsidiary).
- RBC thinks Koch's entrance into the slumping component industry could trigger further consolidation. "Current fab utilization rates remain low ... with optical component vendors unable to charge a premium for their innovation. Gross margins are currently weighed by competitive pressures with optical component makers willing to cut pricing to account for high fixed costs."
- The firm believes Finisar (FNSR +1%) could be a buyer, and JDS Uniphase (JDSU +1.5%) and Oclaro (OCLR +7.1%) sellers. JDS, set to spin off its component unit, is facing activist pressure to put the business on sale.
- Meanwhile, Ciena (CIEN +2.8%) announced this morning it's partnering with Avaya to offer an enterprise solution that pairs its optical networking and integrated optical/Ethernet gear with Avaya's Ethernet switches. Like peers, Ciena is trying to lower its dependence on pressured carrier capex budgets.
- Other gainers: AFOP +3.7%. NPTN +3.3%. ADTN +2.7%. INFN +1.9%.
Nov. 13, 2014, 3:28 PM
- Though Cisco is higher after beating FQ1 estimates and issuing soft FQ2 guidance, many telecom equipment and component/chip names are going in the opposite direction.
- At issue: Cisco reported a 10% Y/Y drop in service provider orders (-18% in the U.S.), while stating on its CC (transcript) it "saw dramatically reduced spend at several large U.S. service providers." The networking giant also suggested demand will remain weak during the next couple of quarters.
- The remarks came just a few days after AT&T set a 2015 capex budget of $18B (down from 2014's $21B), prompting a Monday selloff in equipment vendors and their suppliers.
- Today's decliners: ALU -3.8%. CIEN -2.8%. JDSU -3.1%. FNSR -3.7%. JNPR -1.7%. INFN -3.8%. RKUS -3.4%. ZHNE -3.2%. AMCC -4.1%. CALX -2.7%. CYNI -1.8%. ADTN -3.5%. ALLT -2.4%. FN -1.9%.
Nov. 10, 2014, 9:51 AM
- Declaring its Project VIP network expansion effort ahead of schedule, AT&T has set a 2015 capex budget of $18B, down from 2014's $21B and below a prior forecast of $20B. The figure is equal to only 13% of AT&T's 2015 revenue consensus.
- Telecom equipment and optical component makers, many of whom have already felt the effects of AT&T's subdued 2014 wireline capex, are off in early trading. CSCO -1.4%. ALU -4.8%. CIEN -6.6%. ADTN -7.8%. JNPR -2.5%. RKUS -2.1%. SONS -2.9%. FNSR -2.9%. JDSU -1.1%. RKUS -2.1%. XXIA -2%. FFIV -1.6%. ERIC -1.7%.
- Cisco delivers its FQ1 report on Wednesday. The networking giant reported an 11% Y/Y FQ4 drop in service provider orders, thanks to both weak demand and share loss.
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