After reporting fourth-quarter revenues of $117.1 million on Thursday, Infinera predicted revenues of just $90 million to $97 million for its first quarter, which ends in March.
That's partly because Infinera sold so much gear in mid-2010; customers still haven't filled up those boxes. But another factor is the lack of a 40Gbit/s option for the DTN system. "There are some opportunities in the short term that we are missing out on with customers who would require higher fiber capacity today," CFO Ita Brennan said on Thursday's earnings call.
Why this matters
At worst, this could mean Infinera struggles throughout 2011, especially if 40Gbit/s demand increases. Infinera won't release a 40Gbit/s product until midyear, and its R&D is focused on delivering a 100Gbit/s product in 2012. Analysts think the 100Gbit/s cards could be a huge product for Infinera. But their reports this morning say the company will be treading water in the meantime:
- Mike Genovese of MKM Partners writes: "We expect 2011 to be tough for Infinera as the market for new optical capacity continues to shift to 40G, and Infinera does not have a solution."
- George Notter of Jefferies & Company Inc. writes: "This is now a 'show me' stock. ... It's now clear Infinera will be working through that hangover for the remainder of Q1 at least."
Here's how Infinera's 2010 went, including its 100Gbit/s decision and the prediction of a tepid fourth quarter.
- Infinera Tanks on Q4 Outlook
- Infinera Flexes Its Modulators
- Ciena Hires Infinera Exec
- CxO Download: Tom Fallon of Infinera
- Infinera's Singh Moves On
- Infinera Does OTN
- Infinera 100G Checkup
- A Peek Into Infinera's PICs
- Colt Taps Infinera for Ultra-Low-Latency Service
- Customer Growth Driving Infinera Success
- Infinera Touts Market Share
- Infinera's Old 40G
- 40G: Time for the Third-Party Candidate to Bow Out?
- Infinera Ditches 40G, Talks 100G
- Infinera Puts 100G Coherent on Pause
— Craig Matsumoto, West Coast Editor, Light Reading