Light Reading

Infinera: We're Fine, Thanks…

Ray Le Maistre
1/30/2014
50%
50%

If you're in the 100G optical systems or components sector, here's some good news: Infinera Corp. (Nasdaq: INFN) had an OK fourth quarter and is very upbeat about 2014. (See Infinera Reports Q4, Full Year .)

Why is that so good? Well, the optical vendor, which has been betting on demand for its 100G technology for some time, had prepared the market to expect a grim fourth-quarter report and had something of a cloud hanging over it after news leaked that it hadn't landed the much sought-after transport gear engagement at Verizon Communications Inc. (NYSE: VZ). (See Analyst: Infinera Loses VZ Deal to AlcaLu.)

But its fourth quarter was solid (revenues of $139.1 million), and for the full year the vendor it grew its sales by 24% to $544.1 million, while cutting its operating loss for the year to $24.2 million from $83 million in 2012.

In its earnings release, CEO Tom Fallon noted that Infinera's growth was well ahead of the overall market for DWDM systems of about 12%, driven by demand for its DTN-X platform, which now has 42 customers from all corners of the communications networking world (wholesale carriers, cable, mobile, web services firms) where 100G is now in strong demand. (See Subsea Surge: Telstra Upgrades 3 Routes, Infinera: SDN Can Master Optical Layer, and Rostelecom Deploys Infinera's DTN-X .)

And on the company's earnings call, Fallon admitted that, while the Verizon opportunity was no longer an "opportunity," he expects to sign up new Tier 1 customers this year and benefit from "rapid bandwidth growth in business opportunities in the other markets." He said Infinera is well positioned to gain new business from cable operators and Internet services firms, which are building their own long-haul transport networks, and become even stronger in the wholesale networks market.

The CEO also noted that Infinera had recently landed a "significant" new deal with a long-standing wholesale operator customer and hinted strongly on the call that it was Level 3 Communications Inc. (Nasdaq: LVLT).

And with the 100G market growing and "not anticipated to peak until 2018… I am increasingly optimistic about our short, intermediate, and long-term opportunity," the CEO added.

And as if to back up that statement, CFO Ita Brennan announced on the earnings call that there is greater urgency amongst customers to push ahead with deployments and activations, and that, instead of the normal slow start to the year, Infinera is expecting revenues of between $137 million and $143 million for the first quarter, higher than Wall Street had predicted.

That outlook and the bullish talk lit a fire under Infinera's share price, which climbed more than 28% Thursday to $9.06.

It also had a knock-on effect on rival 100G systems vendor Ciena Corp. (NYSE: CIEN), which saw its stock rise nearly 3% to $23.56.

That all spells good news for any companies active in the 100G market, which is where the hot transport network demand is right now, says Heavy Reading senior analyst Sterling Perrin. "The overall optical market is a slow burner and will probably grow a few percent this year, but 100G is a huge bright spot, though competition is very intense," he notes. "The top vendors in 100G should all do well."

And that, of course, also spells good news for the 100G optical components market, which has already been seeing a positive knock-on effect during the past year and is expecting a further surge in demand. (See 100G Revenue Drives 400G Investment, Finisar Buys Its 100G Buddy, and Will Optical Suffer From Thailand's Political Unrest?)

— Ray Le Maistre, Editor-in-Chief, Light Reading

(2)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
Ray@LR
100%
0%
Ray@LR,
User Rank: Blogger
1/31/2014 | 3:28:50 AM
Valid strategy
Infinera has come in for criticism over the years, often for not being a bigger company than it is. Let's see how big it is by the end of 2015 -- this looks like a company that could post growth rates of more than 10% each year without M&A.

When M&A does happen, that'll be intersting to see where Infinera goes...
DOShea
100%
0%
DOShea,
User Rank: Blogger
1/30/2014 | 4:53:54 PM
Level 3
There has been some talk about Level 3 and Infinera the last few months in optical circles, but it sort of took a back seat (way back) to the Verizon chatter. The timing sounds about right, as Level 3 had been holding off on its deployment decision, but suggested back in the fall that it was getting closer.
Flash Poll
From The Founder
Anshul Sadana answers questions from Steve Saunders, Light Reading's founder and CEO, about Arista's CloudVision, a global cloud network controller for workload orchestration and workflow automation delivering a turnkey solution for cloud networking.
Live Streaming Video
CLOUD / MANAGED SERVICES: Prepping Ethernet for the Cloud
Moderator: Ray LeMaistre Panelists: Jeremy Bye, Leonard Sheahan
Between the CEOs
Video Exclusive With Basil Alwan, Alcatel-Lucent

7|24|15   |   26:44   |   (4) comments


Basil Alwan, President of IP Routing & Transport at Alcatel-Lucent, discusses virtualization, cultural challenges, the capex crunch and more with Light Reading founder and CEO Steve Saunders.
LRTV Custom TV
VDF: Enable the Financial With Mobile Money

7|20|15   |   06:53   |   (0) comments


Ian Ravenscroft discusses how operators can expand to occupy the entire digital services value chain through service innovation.
LRTV Custom TV
Telefónica on OSS Transformation

7|20|15   |   06:01   |   (0) comments


Jose Gonzales discusses the details of Telefónica's operation transformation program.
LRTV Custom TV
Judi Achmadi on Huawei's Cloud Storage Solution

7|20|15   |   03:33   |   (0) comments


Judi discusses the key business goals of TelekomSigma's public cloud service and how Huawei's solution helps them address challenges.
LRTV Custom TV
KPN Enlightening Digital Business & IT Transformation

7|20|15   |   06:19   |   (0) comments


Rob de Beer discusses the changes that operators need to make with service innovation now coming from the Internet world.
LRTV Custom TV
Stratus Telco-Grade Cloud Solutions & NFV

7|20|15   |   07:34   |   (0) comments


Ali Kafel from Stratus Technologies addresses high-availability concerns within the telco industry with a solution that enables telcos to provide high-availability and stateful fault-tolerance using a software-based approach.
LRTV Documentaries
The Six Million Dollar Business Man

7|20|15   |   01:52   |   (0) comments


Steve Saunders, publisher. A man barely alive after an acquisition malfunction imploded the company he founded. Gentlemen, we can rebuild Light Reading. Better, faster, stronger.
Between the CEOs
CEO Chat With Anukool Lakhina, Guavus

7|20|15   |   38:51   |   (1) comment


Guavus CEO Anukool Lakhina talks to Light Reading founder and CEO Steve Saunders about the role of operational analytics in the communications services and networking sectors, particularly in relation to IoT.
LRTV Custom TV
IBM's Flash Storage With Intel QuickAssist

7|20|15   |   03:18   |   (0) comments


Intel's Bev Crair and IBM's Eric Herzog discuss how IBM's V9000 Flash Storage System has helped customers around the world. Featuring real-time compression powered by Intel QuickAssist Technology, the V9000 is a next-gen flash storage solution.
LRTV Huawei Video Resource Center
Thailand's AIS: Transforming to an FMC Operator

7|17|15   |   4:53   |   (0) comments


Saran Phaloprakarn, Senior VP of Fixed Broadband Business Management of Thailand's AIS, was a keynote speaker at the first Asia-Pacific Ultra Broadband Summit in Bangkok. In this video, he talks to Heavy Reading about transforming into an FMC (FBB+MBB+Content) operator.
LRTV Huawei Video Resource Center
Cambodia's TRC Discusses Its Plans for National Broadband

7|17|15   |   10:33   |   (0) comments


In this video, Chakyra Moa, Chairman of Telecommunication Regulator of Cambodia (TRC), talks in in-depth with Heavy Reading about the Cambodia's current telecom market and TRC's goals and expectations for the future.
LRTV Documentaries
5G Phone

7|16|15   |   2:09   |   (4) comments


A man has an opportunity to purchase the world's first working 5G phone. Imagine the possibilities...
Upcoming Live Events
September 16-17, 2015, The Westin Galleria Dallas, Dallas, TX
September 16, 2015, The Westin Galleria Dallas, Dallas, TX
September 16, 2015, The Westin Galleria Dallas, Dallas, TX
September 29-30, 2015, The Westin Grand Müchen, Munich, Germany
October 14-15, 2015, New Orleans Ernest N. Morial Convention Center, New Orleans, LA
November 5, 2015, Hilton Santa Clara, Santa Clara, CA
December 1, 2015, The Westin Times Square, New York City
All Upcoming Live Events
Infographics
Network operators start seeing savings from NFV in the first year, according to a study by Affirmed Networks and ACG.
Hot Topics
T-Mobile Launches RCS Messaging
Sarah Thomas, Editorial Operations Director, 7/22/2015
Huawei Working Hard for Rural Success
Carol Wilson, Editor-at-large, 7/22/2015
AT&T U-verse TV Hits the Skids
Alan Breznick, Cable/Video Practice Leader, 7/24/2015
Robbins Succeeds Chambers as Cisco Changes CEOs
Mitch Wagner, West Coast Bureau Chief, Light Reading, 7/27/2015
RJio to Launch Its Own 4G Devices Brand
Gagandeep Kaur, Contributing Editor, 7/27/2015
Like Us on Facebook
Twitter Feed
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
Basil Alwan, President of IP Routing & Transport at Alcatel-Lucent, discusses virtualization, cultural challenges, the capex crunch and more with Light Reading founder and CEO Steve Saunders.
Guavus CEO Anukool Lakhina talks to Light Reading founder and CEO Steve Saunders about the role of operational analytics in the communications services and networking sectors, particularly in relation to IoT.
Cats with Phones
Distract-a-Cat Click Here
The vibrate function makes for a useful cat distraction.