ADVA Optical beats profit expectations in Q1 2012

ADVA Optical Networking (XETRA: ADV.DE) reported Q1 2012 revenues of €81.7 million ($108 million) in Q1 2012, coming within guidance between €79 million ($104 million) and €83 million ($109.6 million).

The Q1 results illustrated a 16.1 percent year-over-year rise over Q1 2011 from €70.4 million ($92.9 million), but down sequentially from €83.4 million ($110 million) in Q4 2011.

Fueled by ongoing demand for its Ethernet access and carrier infrastructure products, revenues due to ongoing sales of Ethernet and carrier infrastructure products, the vendor's International Financial Reporting Standards (IFRS) pro forma operating revenue was €4.5 million ($5.94 million) or 5.5 percent of revenues, above guidance of between two and five percent of revenues.

During the first quarter, its Ethernet and optical message continued to resonate with a number of key customer wins. In addition to signing a deal with Masergy, which is leveraging the vendor's FSP 150 platform to deliver and adhere to strict Service Level Agreements (SLA), it just signed a deal to provide its FSP 3000 optical platform for a new municipal-run fiber network in Cape Town, Africa.

"We are very pleased with our Q1 2012 revenues of €81.7 million which are at the upper end of guidance," said Jaswir Singh, chief financial officer & chief operating officer of ADVA Optical Networking, in the earnings release. "This is up 16% vs. Q1 2011 and only slightly below the record revenues achieved in Q4 2011. The year-on-year development is driven by increased Ethernet access and carrier infrastructure business."

Like its competitors Alcatel-Lucent (NYSE: ALU), Ciena (Nasdaq: CIEN) and Tellabs (Nasdaq: TLAB), which are also grappling with a challenging economy and slower spending cycles by their major telco customers, ADVA is being realistic about its Q2 2012 outlook. The German vendor has forecast Q2 2012 revenues of between €81 million ($107 million) and €86 million ($114 million).

ADVA Optical's stock was trading at €5.58 ($7.36), up 2.29 percent, on the German exchange as of midday ET.

For more:
- see the release

Special report: Wireline in the first quarter of 2012

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