Jun. 13, 2014, 12:46 PM
Jun. 13, 2014, 9:11 AM
Jun. 12, 2014, 5:36 PM
Jun. 12, 2014, 4:19 PM
- Finisar (FNSR) expects FQ1 revenue of $320M-$335M, above a $317M consensus. But EPS guidance of $0.30-$0.34 is below a $0.41 consensus.
- Gross margin pressure is responsible for both the guidance and FQ4's EPS miss. FQ4 GM was 34.2%, +200 bps Y/Y but -300 bps Q/Q and below guidance of 35.5%. GM is expected to fall to 32% in FQ1.
- Finisar blames the FQ4 margin weakness on telecom product price cuts and the impact of recently-acquired u2t Photonics, whose products carry a lower GM.
- Opex +4.3% Y/Y in FQ4 to $65.9M, well below rev. growth of 25.7%. A 39.1% Y/Y increase in datacom product sales (boosted by the investments of Web/cloud service providers) offset a 2.5% drop in telecom sales, and helped drive the revenue beat.
- JDS Uniphase (JDSU) is following Finisar lower. Other optical component firms that could be hit: OPLK, OCLR, FN, NPTN.
- FQ4 results, PR
Jun. 12, 2014, 4:03 PM
Jun. 11, 2014, 5:35 PM
Jun. 5, 2014, 10:12 AM
- Ciena is flying higher after beating FQ2 estimates and issuing above-consensus FQ3 guidance. As is its custom, rival Infinera (INFN +2.2%) is heading in the same direction as Ciena, as are component vendors Finisar (FNSR +3.6%) and JDS Uniphase (JDSU +1.7%).
- Other gainers include deep packet inspection hardware vendors Allot (ALLT +5.5%) and Procera (PKT +3%), access/metro equipment provider Adtran (ADTN +3%), network processor developer Cavium (CAVM +1.2%), and carrier Wi-Fi hardware vendor Ruckus (RKUS +1.8%). An upbeat Oppenheimer note could be contributing to Allot's gains.
- The rally comes a few days after Ciena and other industry names fell due to a Jefferies report stating AT&T has slashed wireline capex ahead of the DirecTV deal's closing and the full rollout of its giant Domain 2.0 SDN/NFV initiative.
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 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.
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. 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, 11:20 AM
- Though RBC has downgraded JDS Uniphase to Market Perform (along with Ciena), it has upgraded rival Finisar (FNSR +4.7%) to Outperform, while upping its PT to $30 from $26.
- The firm thinks Finisar can outperform peers thanks to a fixed-cost business model and better operating leverage.
- Shares made a new 52-week high of $28.07 on Monday, but proceeded to fall hard amid a general tech selloff.
Mar. 20, 2014, 10:48 AM
- Stifel's Sanjiv Wadhwani has upgraded Infinera (INFN +5.5%) to Buy. Following meetings at last week's OFC 2014 optical networking industry conference, Wadhwani believes demand for 100G systems "is now on a much more global scale versus a year ago," with activity having picked up in Europe and parts of Asia.
- Ciena (CIEN +3.8%), also a major player in the 100G optical transport space, is following Infinera higher. Both companies (as well as several peers) rallied last week after Goldman upgraded Infinera and Calix, while estimating 100G systems have a 15% gross margin edge relative to 10G systems.
- Component makers Finisar (FNSR +2.3%), Oclaro (OCLR +2.6%), and Alliance Fiber (AFOP +3.8%), each of which also have 100G exposure, are rallying as well.
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.
Mar. 11, 2014, 6:46 PM
- Intel's (INTC) new MXC server interconnect cables leverage the chip giant's silicon photonics tech and optical fibers developed by Corning (GLW) to enable 1.6Tbps transfer speeds (800Gbps each way) via 64 fibers running at 25Gbps apiece. Traditional solutions work at 10Gbps, and max out at 12-24 fibers.
- Corning plans to begin selling MXC cable assemblies, which have a range of 300 meters, in Q3. Intel asserts the technology's per-fiber throughput could eventually double to 50Gbps. The companies think supercomputer (HPC) vendors and cloud computing firms will be among the first buyers.
- Over time, MXC's blistering speeds stand to further Intel's goal of creating server architectures in which CPU, memory, storage, networking, and other resources can be separately pooled and upgraded as needed. "The ability to take my memory and stash it a rack away, optical can enable that," says Intel exec Mario Paniccia.
- Intel's efforts pose a challenge to optical component vendor Finisar (FNSR), whose shares sold off a year ago on worries about Intel and Cisco's silicon photonics efforts. They're also a challenge to high-speed interconnect leader Mellanox (MLNX), which last year acquired silicon photonics startup Kotura and 100G interconnect developer IPtronics. Since then, Mellanox has said it will ship 100G silicon photonics products in late 2014 or early 2015.
Mar. 6, 2014, 4:29 PM
- Finisar (FNSR) expects FQ4 revenue of $296M-$311M and EPS of $0.36-$0.40 vs. a consensus of $297.2M and $0.40. Not counting its $27M acquisition of 100G optical component vendor u2t Photonics, the company expects revenue of $290M-$305M and EPS of $0.38-$0.42.
- FQ3 gross margin was 37.2%, +10 bps Q/Q and +650 bps Y/Y. FQ4 GM is expected to fall to 35.5%, or 36% excluding u2t.
- Datacom revenue, lifted by 10G/40G Ethernet sales and Internet data center buildouts, rose 3% Q/Q and 42% Y/Y to $210.3M. Telecom revenue fell 3% Q/Q and 8% Y/Y to $83.7M.
- Opex fell 1% Q/Q and rose 5% Y/Y to $72.6M.
- FQ3 results, PR, slides
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