The earnings calendar for the next two weeks shows two optical system vendors due to post quarterly results -- ADVA and Ciena -- providing a double dose of news for sector watchers eager for any and all updates on 100G-related revenue and future prospects.
ADVA Optical Networking will be first up this Thursday, delivering its fiscal fourth quarter and full year 2014 earnings. The report also will be the first since ADVA named Ulrich Dopfer as CFO last month. Dopfer also took on the role of president of ADVA's North American operations. (See ADVA Appoints New CFO.)
The optical transport and access vendor reported $110 million in revenue in its third quarter last October, and at that time projected fourth quarter revenue would land in the range of $105 million to $111 million. In recent days, the company also announced it's planning a virtualized mobile backhaul demonstration for the upcoming Mobile World Congress.
Ciena Corp. (NYSE: CIEN), meanwhile, will report first quarter 2015 earnings on Thursday, March 5. While the packet optical vendor turned in a net loss for the fourth quarter of 2014, it has continued to be bullish on the 100G market and other segments, claiming that it has a bead on the increasingly important, but also unpredictable, market of web content, cloud and data center operators. (See Ciena Upbeat Despite Q4 Loss.)
Ciena also counts AT&T Inc. (NYSE: T) and Verizon Communications Inc. (NYSE: VZ) as major customers, and though both carriers have indicated they may spend less on capital projects this year than last year, the relationships continue to be fruitful. Michael Genovese, managing director of MKM Partners, said in a research note that he's expecting AT&T to account for about 15% of Ciena's first quarter revenue, a percentage that would be up slightly from last quarter.
Regarding Verizon, Ciena has been rumored to be in line for some imminent 100G metro business at Verizon. Analysts will be eager to hear anything Ciena has to say on next week's earnings call about that project, though neither the vendor nor Verizon has talked publicly about it up to this point. (See Ciena, Cisco Tipped for Verizon Metro 100G and Ciena Seen as Verizon 100G Metro Favorite.)
Genovese figures on Ciena to meet or beat his own revenue estimate of $560 million for the quarter, which could put Ciena in the middle to upper range of its own first quarter revenue projection of $540 million to $570 million. He also wrote that the booming 100G business could be reason to expect big things from Ciena and other vendors.
"100G optical systems is our favorite growth market in the mostly flat telecom equipment industry," he stated. "The 100G market is very attractive compared to the 10G systems market of the past. As the technology has become more complicated (i.e. coherent transmission) the number of players has shrunk considerably. There are also strong new buyers (Web 2.0 and Cable) with real bandwidth needs and business models."
— Dan O'Shea, Managing Editor, Light Reading