ADVA Optical revenues climb to $109.1M, but economic uncertainty dampens forecast

ADVA Optical Networking (XETRA: ADV.DE) reported that Q3 2013 revenues rose 0.9 percent sequentially to $109.1 million, meeting its quarterly guidance between $105 million to $112 million. But a "disappointingly" developing optical market impacted its outlook for the rest of the year.

The company's IFRS pro forma operating income amounted to $6.9 million or 5 percent of revenues in Q3 2013, at the upper end of guidance of between 1 and 5 percent of revenues.

It said the increase in pro forma operating income is due to higher revenues and lower operational expenses, while the year-on-year decrease is largely due to lower revenues in "a weaker demand environment."

Due to the uncertain macroeconomic environment, the vendor has forecast revenues of $100 million to $105 million and pro forma operating income to range between 1 and 5 percent of revenues.

"While our market in H2 2013 so far has been developing disappointingly, ADVA Optical Networking continues to be a leader in innovation with a broad and deep customer base," said Brian Protiva, chief executive officer, in an earnings release. "ADVA Optical Networking's pipeline is expanding, and there are clear signs that we will return to significant growth in our market for Optical+Ethernet solutions."

Two areas where ADVA sees new opportunities emerging are in the wireless backhaul and software defined networking (SDN) market segments.

"Operators are shifting their attention to the next network bottleneck, the transport links connecting the mobile base stations to core networks," Protiva said, adding that "operators are accelerating plans to evaluate the deployment of software defined networking technology, seeking operational efficiency, agility and a more dynamic service offering."

Stopping short of naming any specific customers, Protiva said that they are also seeing interest from a number of service providers for their 100G metro solutions.

For more:
- see the release

Earnings summary: Wireline telecom earnings in the third quarter of 2013

Related articles:
ADVA Optical beats guidance with $103 million in revenue, forecasts higher Q3
ADVA Q1 revenues decline to $101 million on slower carrier sales
ADVA's Q4 revenue of $390.3 million driven by strong EAD sales
ADVA Q3: Revenues rise 3.7% year-on-year to $107.4M

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