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Research Recap: Sonus, Arris

Phil Harvey

1:50 PM -- Another boat of research notes docked at my desk today. Some highlights:

  • Arris: George Notter (Jefferies & Co. Inc. ) writes that even though Arris Group Inc. (Nasdaq: ARRS) put up "very strong" Q2 results, he's "concerned about pricing pressure in the CMTS market" and customer concentration. Still, Notter notes that Arris "should benefit near-term from the Docsis 3.0 upgrade cycle for CMTS and CPE." (See Arris Records Q2 and Arris Pumps Up the Docsis 3.0 Volume .)

    Mark Sue (RBC Capital Markets ) writes that Arris "still needs work" in terms of showing consistent execution, but he notes that the company is "making strong strides with its financial metrics and cash flow generation." You get the feeling that everyone thinks that if they come right out and praise Arris unequivocally, a giant anvil will fall on their heads. (Have I been watching too many cartoons?)

  • LTE: Our report, "Who Makes What: LTE Equipment," went live in May and we've since updated information and listings on the following vendors: Altair Semiconductor , Altera Corp. (Nasdaq: ALTR), Catapult Communications Corp. (Nasdaq: CATT), CommAgility Ltd. , CommScope Inc. , Dyaptive Systems Inc. , Gambit Communications Inc. , Larsen & Toubro Infotech Ltd. , LSI Corp. (NYSE: LSI), NetHawk Oyj , MYMO Wireless Technology, Polaris Networks Inc. , Qasara, Samsung Electronics Co. Ltd. (Korea: SEC), Traffix Systems , and Spirent Communications plc .

    Don't expect any more updates for that report, but do expect that we will be giving a more specific LTE taxonomy in the coming months.

  • 40- & 100- Gbit/s Systems: Another Light Reading report, "Who Makes What: 40- & 100-Gbit/s Systems," went live earlier this month, and since then we've updated and extended the entries for Agilent Technologies Inc. (NYSE: A), Ciena Corp. (NYSE: CIEN), EXFO (Nasdaq: EXFO; Toronto: EXF), and Ixia (Nasdaq: XXIA).

    We've added five new vendors (Enablence Technologies Inc. (Toronto: ENA), MRV Communications Inc. (Nasdaq: MRVC), SHF Communication Technologies AG , TeraXion Inc. , and VI Systems) in the areas of systems, devices/modules/subsystems, and test & measurement. And we've noted some more new test and measurement products, too. LTE T&M seems to be a very active area that we'll be reporting on more.

  • Sonus: George Notter (Jefferies & Co.) is bumping up his 2009 revenue estimate for Sonus Networks Inc. (Nasdaq: SONS) "from $220.5 million to $226.1 million." He notes that Sonus didn't comment on the possibility that it would buy Nortel's Carrier VoIP/Voice Switching assets. A fear of Sonus investors, Notter notes, is that the integration of Nortel's assets would be a tough, tiring process for a company as tightly controlled as Sonus. (See Sonus's Next Trick, KDDI Picks Sonus, Sonus Reports Q2, and Sonus Looking at Nortel Assets, Cedar Point.)

    Catharine Trebnick (Avian Securities LLC ) only has a fiscal-year revenue projection of $209.65M for Sonus. Her channel checks suggest that carriers will more quickly spend on Carrier Ethernet and broadband mobility projects ahead of TDM-to-IP migrations in the near-term.

    Steven J. O'Brien (JP.MorganChase ) is less shocked today than yesterday. He writes that Sonus's second-quarter results were "stronger than we were expecting across the P&L, but Sonus made little change to its FY 2009 outlook. So, he's keeping his powder dry as he observes that "management does not see a near-term inflection point for demand or profitability."

  • — Phil Harvey, Editor-in-Chief, Light Reading

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    [email protected]
    12/5/2012 | 3:59:27 PM
    re: Research Recap: Sonus, Arris

    Unknown to the Editor-in-Chief, the underlings have added another device vendor to the 40 and 100Gbit/s lists -- the Germany-based u2t Photonics AG.

    Tim Hills

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