Light Reading
Positive traction, a better-than-expected Q4, and a giant leap in its share price puts the color back in Infinera's cheeks and provides a positive boost for the 100G sector.

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
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.
Educational Resources
sponsor supplied content
Educational Resources Archive
Flash Poll
From The Founder
It's clear to me that the communications industry is divided into two types of people, and only one is living in the real world.
LRTV Custom TV
The WiFi Road to Riches – 1

10|21|14   |   10:15   |   (0) comments


SCTE Director of Advanced Technologies Steve Harris discusses WiFi deployments, drivers, challenges and advances, including 802.11ac, carrier-grade WiFi, community WiFi, Hotspot 2.0, Passpoint, WiFi-First and voice-over-WiFi.
LRTV Custom TV
Advantech Accelerates 100G Traffic Handling

10|17|14   |   7:56   |   (0) comments


Paul Stevens from Advantech explains why handling 100GbE needs a whole new platform design approach and how Advantech is addressing the needs of equipment providers and carriers to give them the flexibility and performance they will need for SDN and NFV deployment.
LRTV Huawei Video Resource Center
Holland's Imtech Traffic & Infra Discusses Huawei's ICT Solution and Services

10|16|14   |   4:49   |   (0) comments


Dimitry Theebe is from the business unit at Imtech Traffic & Infra which delivers communications solutions for transportations. His partnershp with Huawei began about a years ago. In this video, Theebe speaks more about this partnership and what he hopes to accomplish with Huawei.
LRTV Huawei Video Resource Center
Huawei's Comprehensive Storage Solutions Vital for SVR

10|16|14   |   6:16   |   (0) comments


SVR Information Technology provides cloud services for academic and special sectors. With Huawei's support, SVR and Yildiz Technical University has established Turkey's largest and most advanced High Performance Computing system. CSO Ismail Cem Aslan talks about what he hopes Huawei's OceanStor storage system will bring for him.
LRTV Huawei Video Resource Center
Mexico's Servitron's Impression of Huawei at CCW 2014

10|16|14   |   6:35   |   (0) comments


Servitron is a network operator in Mexico that has been in the trunking industry for the past 20 years. Its COO, Ing. Ragnar Trillo O., explains at Critical Communications World 2014 that his company has been interested in the long-term evolution of LTE technology and its adoption for TETRA.
LRTV Huawei Video Resource Center
Building a Better Dubai

10|16|14   |   2:06   |   (0) comments


Abdulla Ahmed Al Falasi is the director of commercial affairs, a telecommunications coordinator for the government of Dubai. Their areas of service span across multiple industries, including police, safety, shopping malls and more. In this video, Abdulla talks about his department's work with Huawei.
LRTV Huawei Video Resource Center
Huawei Lights Up Malaysia Partner Maju Nusa

10|16|14   |   1:59   |   (0) comments


Malaysia's Maju Nusa is an enterprise partner to Huawei in networking, route switches and telco equipment. At this year's Critical Communications World in Singapore, CTO Pushpender Singh talks about what Huawei's eLTE solutions mean to his company and for Malaysia.
LRTV Custom TV
Evolving From HFC to FTTH Networks

10|15|14   |   2:19   |   (0) comments


Cisco's Todd McCrum delves into the future of cable's HFC plant, examining how DOCSIS 3.1 and advanced video compression will extend its life and how the IP video transition will usher in GPON and EPON over FTTH.
LRTV Custom TV
Exploring the Future of Cable Access

10|15|14   |   6:23   |   (0) comments


Cisco's Brett Wingo looks at where cable access architectures are heading, discussing the impact of DOCSIS 3.1, CCAP, Remote PHY, SDN, virtualization of cable networks and related technologies.
LRTV Custom TV
Optimizing & Monetizing WiFi

10|15|14   |   5:53   |   (0) comments


Cisco's Vince Pandolfi outlines the reasons for cable WiFi's rapid growth, lays out the issues with the technology and explains the new Cisco tools that can help operators monitor and improve their WiFi delivery.
LRTV Huawei Video Resource Center
Emulex & Huawei Collaboration Mutually Beneficial

10|14|14   |   4:17   |   (0) comments


US company Emulex collaborates with Huawei in areas such as blade servers and workload documentation. Mike Heumann of Emulex believes that Huawei has done incredibly well moving from a telecom company into servers and networks, working closely with customers to realize their needs.
LRTV Huawei Video Resource Center
Chile's VZION Looks Forward to Seeing More of Huawei

10|14|14   |   4:43   |   (0) comments


VZION is a systems integrator company in Chile with a focus on virtulization technology. In this video, Cesar Alcacibar talks about the challenges in virtualization and how Huawei helps his company to achieve the best results possible. Alcacibar is expecting more adoption and integration of Huawei technologies in Chile.
Upcoming Live Events
October 29, 2014, New York City
November 6, 2014, Santa Clara
November 11, 2014, Atlanta, GA
December 2, 2014, New York City
December 3, 2014, New York City
December 9-10, 2014, Reykjavik, Iceland
June 9-10, 2015, Chicago, IL
Infographics
WhoIsHostingThis.com presents six of the world's most extreme WiFi hotspots, enabling the most epic selfies you can imagine.
Hot Topics
Forget the Internet, Brace for Skynet
Stephen Saunders, 10/15/2014
HBO Will Go OTT in 2015
Mari Silbey, Independent Technology Editor, 10/15/2014
Google: Carriers & Cloud Providers Need to Cooperate
Mitch Wagner, West Coast Bureau Chief, Light Reading, 10/16/2014
Could Data Be the New 'Currency'?
Ray Le Maistre, Editor-in-chief, 10/16/2014
CBS Takes OTT Plunge
Mari Silbey, Independent Technology Editor, 10/16/2014
Like Us on Facebook
Twitter Feed