Infinera Q4 revenue rises to $139.1 million on strong DTN-X sales, sees strong Q1 customer interest

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Infinera (Nasdaq: INFN) credited growing acceptance of its flagship DTN-X optical platform by more service providers as a key factor of its revenue growing 24 percent year-over-year from $128.1 million in the same period a year ago.

GAAP gross margins for the quarter were 40 percent compared to 48 percent in Q3 2013 and 34 percent in Q4 2012. The company narrowed its net loss $10.2 million, or 8 cents loss per share, down from $16.1 million, or 14 cents loss per share.

For the year 2013, GAAP revenues were $544.1 million, up from $438.4 million in 2012.

"We said we would grow revenues at somewhere between the expected market growth rate for long-haul DWDM of 10% and two times that rate," said Tom Fallon, CEO of Infinera, during the Q4 2013 earnings call. "Analysts now believe that this market is estimated to have grown 12% at the high-end of 2013. Our revenues grew 24% in the same period, at least double the estimated market growth."

A key factor in the Q4 2013 results included new sales of the DTN-X platform.

Fallon said they "added three new DTN-X customer commitments in the quarter, including one customer that is new to Infinera."

Acceptance of the DTN-X platform continues to grow in the service provider community. To date, the vendor has received purchase commitments from 42 customers, including a mix of Tier 1 service providers, cable operators, Internet content providers and bandwidth wholesalers. Out of this group, 15 are new customers to Infinera.

It appears that Infinera could potentially benefit from impending service provider growth in both the OTN and DWDM market segments. Recent market research reports from both Infonetics and Dell'Oro cite continual interest by service providers for both technologies.

Infonetics reported that 86 percent of customers that participated in a recent survey plan to deploy OTN and of those 94 percent prefer a converged solution for the core. Likewise, Dell'Oro revealed in its forecast that they expect total DWDM market growth to be with optical packet transport systems that integrate a centralized cross-connect, which is an OTN switch, with transmission.

Infinera says it is seeing a mix of Tier 1 service providers, wholesale providers, content providers and cable MSOs deploying converged OTN and DWDM systems to meet their bandwidth needs.

Looking towards Q1 2014, the company has forecast revenues to come in the range from $137 million to $143 million.

Although the first quarter is traditionally slow, Ita Brennan, CFO of Infinera, said it is seeing "increased urgencies in customers to complete deployments in Q1 and order gear to enable Q2 network turn up."

Shares of Infinera were trading at $8.62, up $1.56, or 22.10 percent in morning trading on the Nasdaq stock exchange.

For more:
- see the earnings release
- and the earnings transcript

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