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
Wagner’s Ring
Data Centers Drive Telcos Into the Future

8|28|14   |   2:20   |   (2) comments


Data centers are at the heart of key trends driving telecom -- network virtualization, the drive for increased agility, and the need to compete with OTT providers.
LRTV Custom TV
Why SPs Should Consider Cisco's EPN

8|27|14   |   5:40   |   (0) comments


Sultan Dawood from Cisco discusses Cisco's EPN, which enables SPs to build agile and programmable networks delivering new network virtualized services using Cisco's Evolved Services Platform (ESP).
LRTV Huawei Video Resource Center
Huawei’s Showcase @ Big Telecom Event 2014

8|26|14   |   2.56   |   (0) comments


SoftCOM is Huawei's framework for telecom business and network transformation. Haofei Liu, Solution Marketing Manager, Carrier Business Group, Huawei, showcases Huawei's SoftCOM architecture in this video.
LRTV Huawei Video Resource Center
Huawei @ BTE 2014: Director of Integrated Solutions on SoftCOM & NFV Monetization

8|26|14   |   4.43   |   (0) comments


Libin Dai, Director of Integrated Solutions, Carrier Business Group, discusses Huawei's SoftCOM and NFV monetization. Huawei believes that NFV monetization should be service-driven rather than network-driven, and that operators should have network transformation, service transformation and a compatible and collaborative ecosystem in place in order to deploy NFV.
LRTV Huawei Video Resource Center
Huawei @ BTE 2014: Director of US NFV Lab on CloudEdge & the Future of NFV

8|26|14   |   4.06   |   (0) comments


Sean Chen, Director of US NFV Lab at Huawei, discusses Huawei's new approach to NFV in open collaboration. Huawei believes that through Proof of Concept tests, it could help operators learn and communicate with the industry more effectively. Sean believes that successful implementation of NFV should have its values reaching to end users and discusses how Huawei's ...
LRTV Huawei Video Resource Center
Huawei's Highlights @ Big Telecom Event 2014

8|26|14   |   3.34   |   (0) comments


At the Big Telecom Event in Chicago Huawei showcases its high-level strategy, the SoftCOM architecture, which helps operators reduce the cost of ownership of their network infrastructure and generate additional revenue in the ICT service environment. Huawei showcases over 30 pilot programs from across the globe, focusing on the industry-leading commercial ...
LRTV Custom TV
VeEX – Live from the Show

8|21|14   |   5:58   |   (0) comments


An overview of VeEX Test and Measurement solutions including TX300S multi-service test set with VeExpress cloud-based management system, UX400 universal modular platform supporting 100G testing, and the redesigned RXT modular platform.
LRTV Custom TV
Transitioning CE 2.0 Networks Into the SDN & NFV Era With Telco Systems

8|19|14   |   5:19   |   (0) comments


Telco Systems' Ariel Efrati (CEO) and Moshe Shimon (VP of Product Management) discuss virtualization and how the company's new Open Metro Edge solution utilizes the SDN and NFV concepts to accelerate and orchestrate service delivery through its innovative product portfolio and software applications.
LRTV Custom TV
NFV Myths: Is NFV Still Several Years Away?

8|11|14   |   1:13   |   (0) comments


Some say that NFV (network functions virtualization) is still several years away from being implemented on mobile operator networks. This isn't the case. Operators can get started on their paths to NFV now, as this short video from Skyfire shows.
LRTV Custom TV
A New Security Paradigm in SDN/NFV

7|28|14   |   02:54   |   (0) comments


Paul Shaneck, Global Director Network Solutions for Symantec, discusses the evolving virtualized network, explaining how Symantec is leading the security discussion as it relates to SDN and NFV, and helping to ensure the network is protected and compliant.
LRTV Documentaries
Sprint's Network Evolution

7|24|14   |   14:59   |   (0) comments


Sprint's Jay Bluhm gives a keynote speech at the Big Telecom Event (BTE) about Sprint's network and services evolution strategy, including Spark.
LRTV Documentaries
BTE Keynote: The Software-Defined Operator

7|24|14   |   18:43   |   (1) comment


Deutsche Telekom's Axel Clauberg explains the concept of the software-defined operator to the Big Telecom Event (BTE) crowd.
Upcoming Live Events!!
September 16, 2014, Santa Clara, CA
September 16, 2014, Santa Clara, CA
September 23, 2014, Denver, CO
October 29, 2014, New York City
November 6, 2014, Santa Clara
November 11, 2014, Atlanta, GA
December 9-10, 2014, Reykjavik, Iceland
June 9-10, 2015, Chicago, IL
Infographics
A survey conducted by Vasona Networks suggests that 72% of mobile users expect good performance all the time, and they'll blame the network operator when it's not up to par.
Hot Topics
Rogers, Shaw Take Aim at Netflix
Mari Silbey, Independent Technology Editor, 8/26/2014
Utilities to Pump $11.2B Into Smart Grid – Study
Jason Meyers, Senior Editor, Utility Communications/IoT, 8/26/2014
Verizon Launches QR Code Security Solution
Carol Wilson, Editor-at-large, 8/26/2014
Fiber Revival at Deutsche Telekom
Iain Morris, 8/25/2014
M2M's In Fashion: Wearables Play the US Open
Sarah Reedy, Senior Editor, 8/25/2014
Like Us on Facebook
Twitter Feed