Infinera Lowers Forecast

Infinera reaffirms Q2 guidance and provides initial Q3 and updated FY08 revenue outlooks

June 16, 2008

3 Min Read

SUNNYVALE, Calif. -- Infinera Corporation (NasdaqGM:INFN - News) today reaffirmed its guidance for the second fiscal quarter ending June 28, 2008; provided initial revenue guidance for its third quarter ending September 27, 2008; and provided an updated revenue outlook for fiscal year 2008 ending December 27, 2008 that is lower than its previous annual outlook.

The Company provided the financial update today in conjunction with its separate announcement that Deutsche Telekom (DT), one of the world's largest telecom carriers, has selected a new DWDM system from Infinera for its pan-European network. This represents a major win for Infinera at a Tier One carrier. As a result of the initial deployment of the Infinera DTN system with DT, Infinera expects to incur one-time charges totaling approximately $4 million during its second and third quarters.

For its second quarter, the Company reaffirmed its expectation to achieve results within its original guidance set on April 22 of adjusted GAAP revenues between $88 million and $90 million and EPS between $0.01 per share and $0.02 per share. The Company also indicated that it expects to have added at least two new customers in the June quarter, not including DT. The Company will announce its final results for the second quarter on Tuesday, July 22 after the market closes.

For its third quarter, the Company is providing initial preliminary guidance of adjusted GAAP revenue in the range of $75 million to $80 million. As a result, the Company now expects adjusted GAAP revenue for fiscal 2008 to grow approximately 10 percent from its fiscal 2007 invoiced shipments of $309.3 million. Previously, the Company had anticipated year over year adjusted GAAP revenue growth of approximately 25 percent.

The Company attributed the anticipated quarter over quarter revenue decline in the third quarter to current indications that the existing North American customer base will purchase less product in Q3 than previously anticipated. The Company believes this is related to the timing of new network builds at existing customers and the sales cycle with potential new customer wins, along with a product transition associated with its recently announced new system.

Jagdeep Singh, President and Chief Executive Officer of Infinera, said: "Our expected Q2 results and the recently announced DT win demonstrate that Infinera continues to win in the DWDM marketplace. We believe this is because we offer the world's best optical solutions and because we provide the only viable path with which customers can scale their networks to meet bandwidth growth needs into the next decade.

"While the preliminary outlook for our fiscal third quarter is lower than anticipated, we do not believe we have lost any existing customers, we do not believe that we have yielded any market share, and we are confident we will continue to add new customers during the rest of the year. Today's win with Deutsche Telekom and ongoing engagements with other leading carriers worldwide give us continued confidence in the strength of the long term strategy and growth outlook for Infinera."

Infinera Corp. (Nasdaq: INFN)

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