ADVA Q4 revenues drop to $105M but land at upper end of guidance

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ADVA Optical Networking (XETRA: ADV.DE) reported that while fourth-quarter 2013 revenues dropped 5 percent to $105 million, they were at the upper end of its guidance of between $97.4 million and $104 million.

In its third-quarter 2013 earnings, ADVA had forecast revenues of $100 million to $105 million and pro forma operating income to range between 1 and 5 percent of revenues. 

The vendor's International Financial Reporting Standards (IFRS) pro forma operating revenue was $3.2 million in the fourth quarter of 2013 or 3 percent of revenues, which was also in line with guidance of between 1 and 5 percent of revenues. This is down year-over-year from the fourth quarter of 2012 IFRS pro forma operating income of $6.6 million or 6 percent of revenues.

Adva Optical said these results were due to lower revenues in a "weaker demand environment."

Jaswir Singh, CFO and COO of ADVA Optical Networking, said in the earnings release that while the fourth-quarter 2013 results were "a disappointment when measured against our expectations in early 2013, our revenues for the quarter are at the upper end of guidance."

For the year, revenues were $426 million in 2013, down 5.9 percent from $453 million in 2012. The company said these results were due to short-term market weakness driven by adverse macro-economic conditions and temporary shifts in carrier investment priorities. IFRS pro forma operating income amounted to $11.8 million in 2013 or 2.8 percent of revenues, after $30 million in 2012 or 6.6 percent of revenues.

Looking toward the rest of the year, the vendor said it expects to see growth in a few areas: EMEA-based carriers increasing capex, ongoing LTE rollouts and an uptick in enterprise cloud adoption.

One area that ADVA wants to take advantage of is wireless backhaul.

The vendor recently introduced its AnyCell Connectivity solution that it says combines three key elements: carrier Ethernet backhaul, time and phase synchronization and managed optical front haul using WDM technology. It said that the mix of these elements can connect a wireless operator's macro cells, small cells and remote radio heads (RRHs) that are used to support new mobile data demands.

It has forecast first-quarter 2014 revenues of between $102 million and $108 million and anticipates pro forma operating income of between -2 percent and +2 percent of revenues.

For more:
- see the earnings release

Earnings summary: Wireline telecom earnings in the fourth quarter of 2013

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