& cplSiteName &

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. (NYSE: 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.
Light Reading’s Upskill U is a FREE, interactive, online educational resource that delivers must-have education on themes that relate to the overall business transformation taking place in the communications industry.
NEXT COURSE
Wednesday, July 27, 1:00PM EDT
The Changing Face of the Data Center World
Rodney M. Elder, Senior Solutions Architect, Equinix
UPCOMING COURSE SCHEDULE
Wednesday, August 3, 1:00PM EDT
The Central Office Re-Architected as a Data Center
Guru Parulkar, Executive Director, Open Networking Research Center, Open Networking Lab
Wednesday, August 10, 1:00PM EDT
Telcos & Open Source 101
Phil Robb, Senior Technical Director, OpenDaylight
Friday, August 12, 1:00PM EDT
The Role of Open Source in NFV
Jim Fagan, Director, Cloud Practice, Telstra
in association with:
From The Founder
The more things change, the more they stay the same for Juniper's next-gen comms solutions, and that's a good thing.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
LRTV Custom TV
NetScout: Maximizing Enterprise Cloud for Digital Transformation

7|20|16   |   04:53   |   (0) comments


Light Reading Editor Mitch Wagner talks to NetScout CMO Jim McNiel about maximizing the benefits of enterprise cloud and digital transformation while minimizing potential pitfalls with a proper monitoring and instrumentation strategy.
Women in Comms Introduction Videos
Ciena's VP Offers a Career Crash Course

7|20|16   |   4:14   |   (0) comments


How did Ciena's Vice President of Sales, Angela Finn, carve out her career path? Simple, she tells WiC. She stayed true to her company, customers and principles. She shares her advice for women on how to be authentic and credible, as well as for companies that want to make a real change to their culture and practices.
LRTV Custom TV
NFV in 2016: Part 2 – Climbing the Virtualization Maturity Curve

7|19|16   |   06:56   |   (0) comments


Many of the initial use case implementations are single-vendor and self-contained. The industry is still climbing the virtualization maturity curve, needing further clarity and stability in the NFV infrastructure (NFVi) and greater availability and choice of virtualized network functions (VNFs). Interoperability between NFVis and VNFs from different vendors ...
Telecom Innovators Video Showcase
Versa Networks' Kumar Mehta on SD-WAN Managed Services

7|19|16   |     |   (0) comments


In Silicon Valley, Steve Saunders sits down with Versa's Kumar Mehta for an interview focused on why service providers are building SD-WAN managed services, and how Versa's telco customers are innovating.
LRTV Custom TV
Juniper Networks & The Evolution of NFV

7|19|16   |   06:01   |   (0) comments


Senior Juniper Networks executives talk to Light Reading Founder & CEO Steve Saunders about NFV developments and the recent independent evaluation by test lab EANTC of Juniper's Cloud CPE solution.
LRTV Interviews
CenturyLink Goes Beyond Managed WiFi

7|19|16   |     |   (0) comments


CenturyLink's managed WiFi allows enterprises, such as retailers and resorts, to track guest WiFi usage in order to help them better communicate with customers.
LRTV Interviews
AT&T Launches Network Functions on Demand

7|17|16   |   05:26   |   (0) comments


Roman Pacewicz, Senior Vice President, Offer Management & Service Integration, AT&T Business Solutions, discusses the operator's launch of its Network Functions on Demand service.
LRTV Interviews
Enterprise Pitch for Ciscosson

7|14|16   |   04:43   |   (0) comments


After seven months of near silence, Cisco and Ericsson executives publicly discussed details on their extensive partnership. Among the tidbits shared by Martin Zander, VP, group strategy programs, Ericsson, and Doug Webster, VP service provider marketing, Cisco: The partnership was initially launched to serve the service provider market, but is already gaining ...
Wagner’s Ring
Cisco Faces Up to Hypercloud Threat

7|13|16   |   02:42   |   (0) comments


Facebook, Amazon and Google mostly don't buy branded technology for their networks – they build their own. That's a threat to Cisco – and its competitors too – which face potentially dwindling demand for their product. Is Cisco up to the challenge? Light Reading went to the annual Cisco Live conference to find out.
LRTV Huawei Video Resource Center
Building a Better Connected Russia

7|13|16   |     |   (0) comments


At UBBS World Tour 2016, Alla Shabelnikova of Ovum shares the findings of a white paper outlining the challenges and opportunities of broadband rollout in Russia.
LRTV Huawei Video Resource Center
The Global Video Business

7|13|16   |     |   (0) comments


At UBBS World Tour 2016, Roger Feng of Huawei shares insights on the future of video business.
LRTV Huawei Video Resource Center
UBBS World Tour Moscow Highlights

7|13|16   |     |   (0) comments


At UBBS World Tour 2016 at Moscow, Huawei showcases its outstanding progress in video technology.
Upcoming Live Events
September 13-14, 2016, The Curtis Hotel, Denver, CO
September 27, 2016, Philadelphia, PA
November 3, 2016, The Montcalm Marble Arch, London
November 30, 2016, The Westin Times Square, New York City
December 6-8, 2016,
May 16-17, 2017, Austin Convention Center, Austin, TX
All Upcoming Live Events
Infographics
Five of the Top 10 most targeted countries in Check Point Software Technologies' global Malware & Threat Index for Q1 2016 are in Africa.
Hot Topics
SoftBank Muscles In on ARM in $32B Deal
Iain Morris, News Editor, 7/18/2016
Ericsson 'Doubles' Savings Goal as Sales Slump
Iain Morris, News Editor, 7/19/2016
Kevin Lo's Move to Facebook: Sign of Things to Come?
Patrick Donegan, Chief Analyst, Heavy Reading, 7/20/2016
Facebook Gets Its Drone On
Ray Le Maistre, Editor-in-chief, 7/22/2016
Is Dish Going Down the Drain?
Alan Breznick, Cable/Video Practice Leader, Light Reading, 7/21/2016
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
There's no question that, come 2020, 5G technology will turn the world's conception of what mobile networking is on its head. Within the world of 5G development, Dr. ...
I've enjoyed interviewing many interesting people since I rejoined Light Reading, but William A. "Bill" Owens certainly takes the biscuit, as we say where I come from.
Live Digital Audio

Our world has evolved through innovation from the Industrial Revolution of the 1740s to the information age, and it is now entering the Fourth Industrial Revolution, driven by technology. Technology is driving a paradigm shift in the way digital solutions deliver a connected world, changing the way we live, communicate and provide solutions. It can have a powerful impact on how we tackle some of the world’s most pressing problems. In this radio show, Caroline Dowling, President of Communications Infrastructure & Enterprise Computing at Flex, will join Women in Comms Director Sarah Thomas to discuss the impact technology has on society and how it can be a game-changer across the globe; improving lives and creating a smarter world. Dowling, a Cork, Ireland, native and graduate of Harvard Business School's Advanced Management Program, will also discuss her experience managing an international team focused on innovation in an age of high-speed change.