Fueled by higher carrier infrastructure sales and a year-on-year uptick in its Ethernet access business, ADVA Optical Networking (Frankfurt: ADV.F) reported that its Q2 2010 revenues of $87.9 million were above guidance.
Initial guidance had forecast revenues between $80.8 million and $87.2 million, up 18 percent vs. Q2 2009 at $74.6 million and up 8.6 percent vs. $81.1 million reported in Q1 2010.
"We are very pleased with our Q2 2010 revenues of $88 million, which exceed guidance and are up strongly, 8.6 percent vs. the previous quarter and 18.0 percent vs. Q2 2009," said Jaswir Singh, chief financial officer & chief operating officer of ADVA Optical Networking in a release. "This development is driven by higher sales in carrier infrastructure equipment and also by a year-on-year pick-up of our Ethernet access business."
One notable development that could help ADVA break into more accounts in the U.S. market was its partnership with Juniper Networks, which bought a small stake in the German company.
ADVA, however, did see some losses. The vendor's pro forma gross margin at 41.0 percent of revenues came in below the 43.0 percent seen in Q1 2010.
Singh attributes the decline to "the weakening of the EUR against the USD, the transition of its well-established FSP 500 platform to the next-generation FSP 150 platform and elevated costs driven by investments in new growth opportunities, adding that "the impact of the changes in foreign currency exchange rates to our pro forma gross profitability was compensated by net gains from foreign currency hedging recorded below the operating-income line."
Going forward, ADVA Optical Networking has projected that Q3 2010 revenues will come in between $96.2 million and $102.6 million with International Financial Reporting Standards (IFRS) pro forma operating income between two and six percent of revenues.
- see the earnings release here
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