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
Mar. 6, 2014, 4:02 PM| Comment!
Mar. 6, 2014, 12:10 AM
Mar. 5, 2014, 5:35 PM
Feb. 11, 2014, 9:49 AM
- Alcatel-Lucent (ALU -3.7%) has been cut to Equal Weight by Morgan Stanley four days after rallying in response to its Q4 report.
- CenturyLink (CTL +2.2%) has been upgraded to Outperform by Macquarie ahead of tomorrow's Q4 report.
- Sohu (SOHU -4.8%) has been cut to Underweight by Morgan Stanley a day after the company and subsidiary Changyou posted mixed Q4 results and offered weak Q1 guidance.
- Finisar (FNSR +3.9%) has been upgraded to Buy by Jefferies. Rivals JDS Uniphase and Oclaro have delivered market-pleasing earnings reports in recent weeks.
- Allscripts (MDRX +2.3%) has been upgraded to Buy by Maxim. Q4 results are due on Feb. 20.
- Xilinx (XLNX +1.6%) has been started at Buy by MKM.
Jan. 31, 2014, 1:56 PM
- With help from an upgrade to Outperform from William Blair, JDS Uniphase (JDSU +6.9%) is shooting higher following its FQ2 beat, which was accompanied by strong FQ3 guidance and news of two acquisitions.
- Optical component peers Finisar (FNSR +4.5%), Oclaro (OCLR +5.7%), and NeoPhotonics (NPTN +6.5%) are following JDS higher. The fact JDS' optical communications product sales rose 12.1% Y/Y (up from 8.1% in FQ1) is likely going over well.
- Blair's Dmitry Netis is upbeat about JDS' improving carrier test equipment/software business: He expects it will return to positive growth in FQ3 after years of declines, grow 2.5% in FY14 (ends in June), and grow 9% in FY15.
- MKM (Neutral, PT upped to $15 from $13) observes rising 100G optical component demand (previous) is giving JDS a lift; Finisar and NeoPhotonics also have solid 100G exposure.
- Barclays is pleased FQ3 revenue is expected to grow 6% excluding a gesture recognition business affected by Xbox One/Kinect seasonality, but nonetheless considers Finisar a better investment due to its "cleaner" datacom exposure.
- CC transcript
Jan. 22, 2014, 4:05 PM
- After reporting an EPS beat and in-line revenue this morning, Adtran (ADTN +4.5%) guided on its CC for Q1 revenue to be flat to down by a mid-single digit percentage Q/Q.
- Though the consensus is for revenue to be down less than 1% Q/Q to $158.8M, investors are taking heart in Adtran's forecast, given it follows warnings from several telecom equipment names.
- A slew of telecom equipment and component/chip vendors followed Adtran higher today. JDSU +3.1%. NPTN +4.6%. FNSR +2.3%. [CIEN] +2.1%. ALLT +2.6%. PKT +1.8%. CALX +1.7%.
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. 8, 2014, 5:23 PM
- Finisar (FNSR) is acquiring u2t Photonics, a German maker of 100G optical components (specifically, receivers and photodetectors), for $20M in cash + $7M in assumed net debt. With u2t having posted 2013 revenue of $33M, Finisar is paying just 0.82x trailing sales. (PR)
- Finisar, which has already partnered with u2t to create 100G modulators, says the deal will help it deliver end-to-end/vertically integrated 100G modules, as well as build smaller modules and products supporting higher data rates.
- Demand for 100G optical networking systems has been taking off over the last year. Finisar's purchase comes amid ongoing concerns (dismissed by the company) about the long-term impact of 100G silicon photonics solutions being developed by Cisco, Intel, and others. u2T's components rely on indium phosphide, a relatively costly/high-performance material.
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