ADVA Q3: Revenues rise 3.7% year-on-year to $107.4M

Declined 4 percent sequentially
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ADVA Optical Networking (XETRA: ADV.DE) on Monday reported Q3 2012 revenues were €82.3 million ($107.4 million), up 3.7 percent year-on-year from €79.3 million ($104 million) in Q3 2011.

The Munich-based optical vendor said the Q3 2012 results were in line with its previous guidance of €82 million ($107 million) and €87 million ($114 million) and down 4.2 percent sequentially from €85.9 million ($112 million) achieved in Q2 2012.

"At €82.3 million, our Q3 2012 revenues are in line with guidance and up 4 percent year-on-year," Jaswir Singh, chief financial officer & COO of ADVA Optical Networking, in the earnings release.

Singh said that the "the 4 percent revenue decline is due to temporarily weaker demand in the Americas and the Asia-Pacific regions."

International Financial Reporting Standards (IFRS) pro forma operating income was €5.6 million ($7.31 million) or 6.8 percent of revenues, at the upper half of guidance of between 4 percent and 8 percent of revenues.

Brian Protiva, CEO of ADVA Optical Networking, said that while the company has seen its customer base spending less on wireline in the recent quarter due to a greater emphasis on wireless and overall economic uncertainty, he believes that eventually the pendulum will swing back especially as service providers look to expand their broadband networks.

"In order to pave the way to generating new revenue streams, major mobile broadband upgrades, especially LTE rollouts, are absorbing much of the available capital and are fundamental to sustaining a profitable business model," he said in the earnings release. "Thus, network providers are currently under-investing and delaying project rollouts in wireline activities based on capital market pressures. Nonetheless, due to further broadband growth, a rebound in wireline capital spending is inevitable."

One area where ADVA Optical Networking continues to see growth related to wireless is in securing more wireless backhaul wins from wireless operators and wholesale carriers for wireless backhaul services.

Although it is being cautious about Q4 2012 due to ongoing economic uncertainty, ADVA Optical Networking has forecast earnings between €77 million ($101 million) and €82 million ($107 million). In addition, the vendor anticipates Q4 2012 pro forma operating income to be in the range between 2 to 6 percent of revenues.

For more:
- see the earnings release

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