ADVA Optical Networking posts record revenues in Q2

Despite an economic climate that remains somewhat unfriendly to network equipment purchasing, ADVA Optical Networking (XETRA: ADV.DE) reported revenues that climbed 10.3 percent year-over-year and 5.2 percent sequentially to a record €85.9 million ($104.4 million) in the second quarter of 2012.

Diluted earnings per share reached €0.10 ($0.12).

Demand for Ethernet transport solutions for mobile backhaul, along with investment in carrier infrastructure and higher demand for enterprise access solutions, were the keys to ADVA's earnings romp, according to CFO and COO Jaswir Singh.

Managing costs and shaking up its customer mix and products led to a pro forma gross margin of 45.4% (excluding its capitalized development projects), an increase of 5.4 percent over the last quarter and 1.9 percent year over year.

While the EMEA region remained ADVA's biggest revenue source, from which €48.3 million ($58.7 million) or 56 percent of revenues came in the quarter, the Americas made up the second biggest portion making up 38 percent of total sales, or €32.1 million ($39.02 million). Asia Pacific revenues made up just 6 percent of the pie, at €5.4 million ($6.56 million), but showed a decent rise from Q1 when ADVA recorded €4.7 million ($5.71 million) in sales from the region.

ADVA's partnership with Juniper Networks (NYSE: JNPR) continues to be one that ADVA appears to really bank on. "What we have said and committed to as our goal is that we'd like to see more than €10 million ($12.2 million) contribution from them. That's still our target for this year," CEO Brian Protiva told analyst Mirko Maier on the earnings call.

Tier 1 carriers and larger providers in the United States helped drive ADVA's profitability as well.

"One particular MSO was quite strong for us moving through this year, growing, as we move in all our Ethernet products into their architecture," Protiva said. "I see a lot of opportunity in the Americas as a whole for ADVA, and I hope to grow that even further over the next 1.5 years. I think we have an excellent team in place with really strong products that will make us very competitive."

Protiva credited the company's "strong R&D investments over the last two years" as well as winning several major accounts, including the NYSE [Euronext] and the Amsterdam Internet Exchange.

For the third quarter, ADVA's outlook, not surprisingly, is optimistic, predicting revenues between €82 and €87 million ($99.7 and $105.8 million).

For more:
- see the earnings release

Earnings Report: Wireline in the second quarter of 2012

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