ADVA, Infinera post Q4 revenue declines

optical fiber
The optical transport market is still likely to see strong growth in the coming years, Dell'Oro said. (Getty Images)

ADVA Optical Networking reported a revenue decline for the fourth quarter of 2020, but the Germany-based vendor largely blamed the decline on the weakening U.S. dollar against the Euro.

The company also claimed to be weathering the market effects of the Covid-19 pandemic fairly well, despite issues such as component supply bottlenecks that it said were apparent in the first, second and fourth quarters of last year. Also, ADVA acknowledged that some customer orders recently needed to be postponed as some countries tightened their pandemic lockdowns.

In ADVA’s fourth quarter earnings report, the company said it posted revenue of EUR 140.6 million for the final quarter of 2020, which represented a 4.2% decline from the EUR 146.7 million reported in the previous quarter and a 7% drop year over year.

The company additionally noted that its pro forma operating income for the fourth quarter of last year was EUR 14.3 million or about 10.2% of revenues, which is the highest figure ever reported by ADVA.

“2020 was a challenging but very successful year for us. At the beginning of the pandemic, the uncertainties were high. However, we responded quickly to ensure that we could navigate through the crisis as best as possible. As a result, we’re reporting today one of the most successful financial years in the company’s history. In the final quarter, our pro forma operating income was even at 10.2% – a number that we have never achieved before,” commented Uli Dopfer, CFO, ADVA.

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ADVA’s fourth quarter report came a day after fellow optical networking vendor Infinera reported its own fourth quarter earnings, with revenue of $353.5 million for the final quarter of 2020. That figure was down year over year from the $384.6 million $340.2 million in the third quarter of 2020 and $384.6 million in the fourth quarter of 2019. 

In its earnings call comments, Infinera, like ADVA, acknowledged that supply chain problems presented a challenge during the last year. Supply chain problems affected virtually every major industry over the last year, and research firm Cignal AI first noted last summer that delays and shortages affecting telecom were especially persistent.

While ADVA, Infinera and other optical networking vendors have faced challenges over the last year, research firm Dell’Oro Group recently said that overall optical transport revenue should continue to rise through 2025.