Feb. 14, 2014, 9:13 AM
Feb. 11, 2014, 4:14 PM
Jan. 21, 2014, 1:42 PM
- Jefferies' Geroge Notter reports Infinera (INFN -11.5%) has lost a $100M Verizon contract for long-haul optical transmission hardware to Alcatel-Lucent (ALU +0.5%). Infinera was considered the favorite to win the deal, which will make Alcatel Verizon's second long-haul supplier. Ciena (CIEN +3.9%) is the other.
- Notter reports hearing "pricing was exceedingly low" for the deal, and that this, along with an intervention by Alcatel CEO Michel Combes, helped Alcatel win out even though Verizon's tech people are partial to Infinera's innovative DTN-X transmission platform (previous).
- Notter: "The anecdote serves as another reminder that the best technology doesn't always win in the Communications Infrastructure space ... Relationships and pricing can go a long way." Infinera is said to have invested heavily in trying to win over Verizon, which would have acted as a major reference account.
- Possibly motivating Alcatel to price aggressively: The company's optical transport sales fell 1.8% YY in Q3, and have been under pressure for a while. Alcatel reports on Feb. 6, and Infinera on Jan. 29.
Jan. 9, 2014, 12:59 PM
- Calix's Q4 warning, which has come in the wake of warnings (I, II) from fellow telecom equipment suppliers Cyan (CYNI -2.4%) and Procera (PKT -2.6%), has sparked a general selloff in telecom equipment and component/chip names. A Deutsche downgrade of Alcatel-Lucent, one of the best-performing names in the space in 2013, could also be playing a role.
- Calix, Cyan, and Procera all have considerable exposure to U.S. carriers not named AT&T or Verizon. While Calix didn't mention which region(s) are responsible for its warning, Cyan blamed an 88% Q/Q drop in sales to U.S. telco/top customer Windstream, and Procera blamed soft demand from U.S. cable providers.
- Notable decliners: CSCO -1.1% JDSU -5.2%. ADTN -5.1% (competes with Calix). FNSR -4.2% (just announced an acquisition). INFN -2.9%. AMCC -2.5%. CIEN -2.4%. BSFT -6.1%. SONS -2.1%.
- The group sold off a month ago after Cisco cut its long-term growth outlook.
Jan. 7, 2014, 12:46 PM
Jan. 7, 2014, 9:16 AM
Jan. 6, 2014, 5:38 PM
Jan. 6, 2014, 4:38 PM
- Cyan (CYNI) shares crater 22.6% AH following the company's preliminary revenue announcement of $20M-$21M, miles below the previous $30M-$33M guidance and analyst expectations of $31.3M.
- The company attributed the decline to an 88% Q/Q decrease in revenue from its largest customer to $2M.
- a silver lining: revenue on the year expanded 32%-34% Y/Y to $70M-$71M excluding the largest customer as Cyan diversifies its base.
Dec. 20, 2013, 1:34 PM
- FBR's Scott Thompson has started coverage on Infinera (INFN +1.6%) with an Outperform and $12.50 PT. He expects the optical networking space to "experience stronger performance in 2014 versus 2013" thanks to several catalysts he expects will "one of the strongest optical cycles the industry has seen in more than two decades."
- Thompson also reiterates an argument he made in a Dec. 4 note on Ciena (CIEN +2.3%): That telecom networks are migrating towards architectures that offer greater optical layer intelligence/flexibility, and in doing so require less money to be spent on switches/routers.
- Thompson thinks this architecture shift is partly responsible for the recent weakness seen in Cisco's (CSCO +0.6%) service provider sales.
- As for Infinera, a major player in the 100G optical transmission space, Thompson declares the company to have the strongest exposure to the optical segments where "the shift will be the most pronounced."
- In addition to Infinera and Ciena, a couple other optical networking hardware vendors are doing well on a good day for tech, as are some component suppliers. CYNI +4.3%. AFOP +5.9%. OPLK +2.8%. OCLR +2.4%. ADTN +1.9%.
Dec. 13, 2013, 9:38 AM
- Amazon (AMZN +1.3%) has been upgraded to Strong Buy by ISI.
- Stratasys (SSYS +2.5%) has been started at Overweight by Stephens.
- Ciena (CIEN +1.5%) has been upgraded to Outperform by BMO a day after posting mixed FQ4 results and slightly disappointing FQ1 revenue guidance (midpoint below consensus).
- Ubiquiti (UBNT +1.1%) has been started at Outperform by Wells Fargo.
- Procera (PKT +2.1%) has been started at Buy by D.A. Davidson.
- China Mobile Games (CMGE +3%) has been started at Buy by Brean.
Dec. 12, 2013, 7:31 AM
- Ciena (CIEN) tumbles 11.5% premarket after a big miss on FQ4 results - reporting adjusted EPS of $0.16 per share vs. expectations of $0.24.
- Adjusted gross margin of 40.8% compares to 43.6% the previous quarter. Adjusted operating margin of 4.7% falls from 8.2% the previous quarter. Operating expenses rose to $210.5M from $190.4M.
- FQ1 revenue guidance of $515M-$545M is inline with Street expectations.
- The company will swap its Nasdaq (NDAQ) listing for one on the NYSE (ICE). The stock symbol will remain the same.
- FQ4 results, press release
- CC at 8:30 ET
Dec. 4, 2013, 2:59 PM
- FBR's Scott Thompson thinks Ciena (CIEN +7%) will deliver a beat-and-raise FQ4 report on Dec. 12, and sees the telecom equipment vendor benefiting from carrier adoption of network architectures that feature "more intelligence and flexibility at the optical layer."
- Thompson sees carriers building more advanced metro optical networks, replete with data centers that enable services such as content caching, app hosting, and advanced mobile messaging. He points to a recent optical switching deal between Verizon and Ciena as an example of how the latter benefits from this trend, and sees a similar deal with AT&T arriving soon.
- At the same time, he cautions optical gross margins "could be under pressure," thanks to aggressive pricing from Infinera (INFN +2%), lengthy deployment times, and the adoption of software-defined networking controllers (CYNI is among the companies providing them) that remove some intelligence from the optical layer.
- Ciena flew higher three months ago following its FQ3 report. The company reported solid demand for its integrated Ethernet switching/optical networking hardware, which now accounts for 56% of revenue.
- Infinera is following Ciena higher, and so are Finisar (FNSR +5.2%), JDS Uniphase (JDSU +3.1%), Fabrinet (FN +1.8%), and AppliedMicro (AMCC +3.9%).
Nov. 14, 2013, 12:45 PM
Nov. 14, 2013, 10:13 AM
- The list of enterprise hardware/software, telecom equipment, and component/chip suppliers selling off (previous) due to Cisco's poor guidance and order data now includes Oracle (ORCL -2.4%), EZchip (EZCH -6.1%), Riverbed (RVBD -6%, shot higher yesterday on M&A hopes), NeoPhotonics (NPTN -6.6%), Ixia (XXIA -4.7%), Oclaro (OCLR -4%), Procera (PKT -2.3%), and Alliance Fiber (AFOP -3.8%).
- Cisco's weak service provider (-13% Y/Y) and emerging markets (-12%) orders are worrying investors in peers/suppliers, particularly given some peers (I, II) have also reported of soft carrier and/or EM demand. John Chambers' admission the NSA spying scandal has affected sales in China (orders -18%) also isn't going over well.
- However, many on the sell-side argue a big portion of Cisco's problems are tied to company-specific product issues.
- H-P (HPQ -5.6%), which has plenty of Chinese exposure, has added considerably to yesterday's AH losses, and so have Ciena (CIEN -5.3%) and Finisar (FNSR -10%). H-P's FQ4 report is due on Nov. 26, and Ciena's FQ4 report arrives on Dec. 12.
Nov. 13, 2013, 8:34 PM
- Cisco's (CSCO) dispiriting Jan. quarter guidance and Oct. quarter order data has produced an AH selloff in enterprise IT and telecom equipment names, as well as a couple of the companies supplying them. NetApp's below-consensus guidance might not be helping either.
- HPQ -2.1% AH. IBM -1.1%. ALU -2%. FFIV -1.9%. CIEN -0.9%. CAVM -3%. BRCM -1.3%.
- Cisco's slumping FQ1 service provider (-13% Y/Y) and emerging markets (-12%) orders are bound to fuel concerns about carrier capex and macro trends. At the same time, it's worth noting Juniper and Alcatel-Lucent have been seeing better router sales to carriers (though not to Asia), and that Huawei has been doing better in emerging markets.
- The rest of Cisco's order data for major regions and customer groups was relatively better, but not exactly encouraging. Americas orders -2%, EMEA -4%, Asia-Pac (hurt by emerging markets weakness) -9%. Enterprise orders +2%, commercial (SMBs) +1%, public sector -1%.
- Switch sales (31% of revenue) rose 3% Y/Y, while routers (17% of revenue) fell 1%. Collaboration rose 1%, and service provider video fell 14% due to set-top weakness. Cisco's ASR 9000 edge router line, which EZchip (EZCH) supplies network processors for, grew 20% in FQ1 vs. 43% in FQ4.
- Data center (UCS servers) had another strong quarter, growing 44%, but still only accounts for 5% of revenue. Wireless (dominated by Wi-Fi gear) grew only 8% after growing 32% in FQ4 (could be a negative for ARUN and RKUS).
- John Chambers was asked on the CC (transcript) if the NSA spying uproar was affecting Cisco. He admitted it's a problem in China, but denied it was a major issue elsewhere.
Nov. 12, 2013, 9:44 AM
- Voxeljet (VJET -3.5%) has received one bullish rating and two neutral ones on underwriter coverage day.
- Veeco (VECO -3.6%) has been cut to Sell by Noble Financial, and started at Sell by Canaccord. The company delivered mixed Q3 results last Friday.
- Rovi (ROVI +4.1%) has been upgraded to Sector Perform by Pac Crest. The upgrade comes as Rovi announces a DivX video codec licensing deal with Panasonic. Goldman cut shares to Sell last week, following the company's Q3 miss.
- Gogo (GOGO +2.2%) has been cut to Neutral by UBS after flying higher yesterday thanks to a Q3 beat and strong Q4 guidance.
- Faro (FARO -2%) has been cut to Hold by Stifel. Shares closed yesterday near their 52-week high, after surging two weeks ago in response to a Q3 beat.
- Cyan (CYNI +4.2%) has been started at Market Perform by FBR. With shares having closed near their post-IPO lows yesterday, investors seem pleased.
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