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Infinera Readies the 100G Charge

Regaining some of its swagger, Infinera Corp. (Nasdaq: INFN) went a bit on the offensive in its earnings call Tuesday, downplaying its lack of a 40Gbit/s product and saying customers are waiting on its upcoming 100Gbit/s platform.

It's not as though Infinera got timid, but the company did spend a couple of quarters admitting that the lack of a 40Gbit/s option was costing it some short-term sales. (See Infinera's Looking at a Tough 2011.)

But on Tuesday, during its earnings call, Infinera got a little more aggressive in saying 40Gbit/s might not be so strong a long-term market. Like some analysts, Infinera believes service providers will jump to 100 Gbit/s once those products are available and start coming down in price.

"As I talk to customers around the world in different markets, for the vast majority of them, they are waiting to deploy 100Gbit/s, although their timeline on 100Gbit/s varies from 2012 to 2014," CEO Tom Fallon said. Fallon noted that most forecasts have 40Gbit/s port sales growing for several years, but he's thinking a lot of the growth right now is in non-coherent 40Gbit/s installations in China, a trend that's unlikely to last.

Infinera certainly isn't ignoring 40 Gbit/s, a market Fallon called "substantive, probably well over $1 billion." The company still expects to take orders for a 40Gbit/s product in the September quarter, although officials don't expect it to generate any revenues during the quarter.

But the real prize for Infinera is its 100Gbit/s product, based on a photonic integrated circuit (PIC) carrying an aggregate 500Gbit/s of traffic. Infinera still expects to announce that product this year, with trials in the first quarter of 2012 and volume shipments in the second quarter, Fallon said.

For its third quarter, which ends in September, Infinera is expecting revenues of $97 million to $103 million, on par with analysts' consensus of $99.8 million as tallied by Thomson Reuters . But an expected net loss of 10 to 12 cents per share is below the consensus of 9 cents.

Infinera shares were trading up 33 cents (5 percent) at $6.90 in after-hours on Tuesday.

— Craig Matsumoto, West Coast Editor, Light Reading

Rush21120 12/5/2012 | 4:58:32 PM
re: Infinera Readies the 100G Charge

I concur with Fallon, 100G is where ROW wants to be, 40G is primarily driven by China in the short term.  I think Infinera has it right, however this is also R&D $ and where you invest too.  Infinera is not a huge company with huger growth expectations and certainly needs to watch where it's investments are best utilized.

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