2013 Leading Lights Finalists: Company of the Year (Public)
None of the Leading Lights awards categories are easy to judge, but selecting the best public companies is always a challenge. Can a public company be considered for this award if it has had an astounding year of growth, profitability, and strategic execution but its share price has dipped compared with 12 months ago?
The answer is yes, it can. Obviously if a company's stock has tanked it's not going to make the cut, but this category is really about identifying the listed companies that stand out from the crowd, develop and communicate a strategy that benefits customers, partners, employees and investors alike, and then acts on that strategy. It certainly isn't about making portfolio recommendations.
We already announced which five companies made the shortlist when we unveiled our full list of Leading Lights finalists in 12 categories.
Now here's why those five firms that made the Company of the Year (Public) shortlist were chosen (in alphabetical order).
The telecom sector has had its ups and downs in recent years but Service Provider Information Technology (SPIT) giant Amdocs is a consistent profit machine, generating enviable net income from a consistent revenue stream: During the first three quarters of its most recent fiscal year (to June 30), the company reported net income of $293.4 million from revenues of $2.42 billion and is set to report an increase of full fiscal year sales of about 3 percent when it files its report in November.
Best known for its bespoke BSS solutions, Amdocs has been branching out into adjacent sectors -- most notably policy control, analytics, and mobile network management -- in recent times through targeted acquisitions. And during the past year the company has integrated its PCRF capabilities with its OSS and BSS functionality in its CES 9 product, which received positive acclaim, and embraced network functions virtualization (NFV), while also exploring new partnership possibilities that could help it break into new markets.
The company's share price stood at $36.87 when it submitted its Leading Lights entry, up 15 percent year-on-year.
- Amdocs Dives Into Mobile SPIT Pool
- MW13: Amdocs Embraces Virtualization
- Amdocs Ain't What It Used to Be
- Why Amdocs Is 'Seeing' Microsoft
For AT&T, the current strategy is all about broadband and that doesn't come cheap. But the US giant believes this is the path to generating higher revenues and securing a return on its investments.
AT&T is pushing towards faster 4G networks and U-Verse broadband expansion with Project Velocity IP, or "VIP" for short. The long-term upgrade plan has the company spending $14 billion on building out LTE networks to cover the vast majority of the US population (300 million people) and expanding its U-Verse footprint to cover 33 million people by 2015. The upgrades will involve installing 10,000 new macrocells, 40,000-plus small cells and 1,000 distributed antenna systems to boost coverage.
Much of the 4G heavy lifting has been happening in the first year of the project, with the operator already offering 4G service in more than 400 markets and expecting to cover 270 million potential customers with the new wireless data technology by the end of 2013.
Underpinning this emphasis on current and future wireless growth is AT&T's ability to open up new spectrum. AT&T closed a $1.9 billion purchase of 700MHz spectrum from Verizon this September, which it will use to improve LTE service in 18 US states. The operator also got the go-ahead from the FCC to deploy LTE in a 20MHz band of 2.3GHz WCS spectrum, a frequency previously reserved for satellite applications. This spectrum will start to come online sometime in 2014 and could be used for anything from a fixed high-speed 4G service to bolstering the operator's wireless backhaul capabilities.
So the emphasis right now is on investing for the future, an outlook that might also lead to some international expansion.
In the meantime, AT&T continues to generate profits, reporting net income of $3.82 billion from sales of $32 billion for the second quarter of 2013. The operator's share price stood at $33.31 when it submitted its Leading Lights entry, compared with $36.81 a year earlier.
- AT&T Hits 400 4G LTE Markets
- AT&T LTE to Be 'Substantially Complete' by Summer 2014
- AT&T Strikes $1.9B Spectrum Deal With Verizon
Calix is riding the broadband wave in North America, increasing its business as high-speed access networks attract further investment. The vendor, which is now Ericsson's global preferred partner for fixed broadband access products, is also making strenuous efforts to expand internationally (especially in Europe), and recently landed a deal in the Netherlands for its Ethernet Service Access Platform technology.
Its focus is paying off in terms of sales growth, with Calix reporting a 17.5 percent year-on-year hike in revenues for the first half of 2013 to $185 million, while its income before stock-based compensation and amortization costs (its non-GAAP net income) increased significantly during the same period to $7.9 million. Investors like those trends, as Calix's share price more than doubled in the past year, standing at $13.09 when the vendor submitted its Leading Lights entry, compared with $5.18 a year earlier.
- Calix Continues Its Euro Push
- Calix Doubles Its GPON Port Density
- Calix Closes Ericsson Deal, Begins Global Reseller Agreement
It's hard to imagine there's another company in our industry that has undertaken such a dramatic transformation during the past year as Canadian SPIT vendor Redknee. What's just as remarkable is that the company's elevation from respected minnow to serious challenger is no fluke, no accident, but is the result of a long-harbored ambitious game plan that's now being executed by CEO Lucas Skoczkowski.
While developing and successfully promoting what it calls its "out-of-the-box" converged billing and customer care solution, Redknee was preparing to mix it with the BSS sector's big boys by lining up financial backing for an acquisition that few others might have contemplated. Earlier this year Redknee bought the BSS business of Nokia Solutions and Networks (NSN) for a modest sum and in doing so more than doubled its headcount, customer base, and revenues.
So when Redknee unveiled its fiscal third-quarter results on August 14, it was able to report revenues of $58.6 million, up from $14.8 million a year earlier (up by 295 percent).
Skoczkowski knows this is a big move for a small company and has been leading by example both before and since the acquisition was closed, visiting customers, employees, partners, and investors to ensure the company's plans are communicated and implemented.
So far, so good. Redknee's share price stood at C$4.53 when it submitted its Leading Lights entry, compared with C$1.28 a year earlier.
- What Will Redknee Get From NSN's BSS Biz?
- Redknee Acquires BSS Division of NSN
- Redknee CEO: Size Matters
Transmode Systems AB
If Redknee's journey during the past year could be described as a rollercoaster ride, then Transmode's might be called a comfortable highway cruise. But that doesn't make it any less impressive.
The Swedish packet/optical transport equipment vendor is carefully managed by its leadership team yet not trailing in terms of market developments and innovation. It also keeps a tight control on its costs, allowing it to boast enviable margins (an operating profit margin of 17 percent for the first half of 2013) in what is an aggressively competitive market.
By leveraging regional partnerships and focusing on specific markets, Transmode reported a near 6 percent increase in revenues for the first half of 2013 to 533.8 million Swedish krona (US$82.7 million): That increase would have stood at more than 11 percent if it wasn't for unfavorable exchange rate fluctuations.
The company continues to add new customers and prove itself in the 100G market, despite formidable competition. And its investors have been responding: Transmode's share price stood at SEK98.50 when it submitted its Leading Lights entry, compared with SEK73.25 a year earlier, a rise of 34.5 percent.
- Transmode Sharpens Regional Focus
- Megafon Upgrades With NEC & Transmode
- Hutchison Global Picks Transmode for 100G
- Transmode Reports Q1 Profit of SEK31.9M
- Transmode Boasts 100G Deployments
What do you think of this shortlist? Feel free to weigh in on the message boards below.
The Leading Lights winners and latest Hall of Fame inductees will be revealed at the Leading Lights awards dinner, which will be held during the evening of Tuesday, October 1 at the super-cool The Out hotel in New York City. (For more details, see Leading Lights 2013.)
That all-night party will be followed by the Ethernet & SDN Expo, which takes place at the Javits Center, NYC, on October 2–3.
— Ray Le Maistre, Editor-in-Chief, Light Reading
Interested in learning more on this topic? Then come to Ethernet & SDN Expo, a Light Reading Live event that takes place Oct. 2-3, 2013 at the Javits Center in New York City. Co-located with Interop, Light Reading's Ethernet & SDN Expo will focus on how the convergence of Carrier Ethernet 2.0 with emerging carrier software-defined networking (SDN) and network functions virtualization technologies could change the whole telecom landscape for service providers. For more information, or to register, click here.