ADVA Q3 revenue rises 10% to $110M on strong enterprise sales

ADVA Optical Networking reported that third-quarter 2014 revenues rose 10.2 percent year-over-year to $110 million due to strong enterprise and transport sales.

"We are pleased with the development of our Q3 2014 revenues of EUR 87.1 million, near the record level seen in the previous quarter, and slightly above guidance," said Jaswir Singh, CFO and COO of ADVA Optical Networking, in the earnings release. "The year-on-year increase of 10.2% is based on stronger enterprise business requiring more and improved high-speed transport networks. This is largely due to continued network traffic growth as a result of the increased adoption of cloud based services."

However, ADVA's pro forma operating profit slipped to $4.4 million from $5.1 million in the same period a year ago, but rose sequentially on the back of higher gross margins and lower operational expenses. Driven by tax benefits and helped by positive foreign exchange market effects, IFRS net profit was $5.6 million, up from $2.9 million the year before.

From a regional point of view, Europe is the dominant contributor to ADVA's revenue mix with 58 percent of total revenues. North America and Asia-Pacific make up 33 and 9 percent of revenues, respectively.

Looking forward, ADVA has forecast revenues to be in the range of $105 million and $111 million, and anticipates pro forma operating income of between 2 percent and 6 percent of revenues.

However, the vendor notes that it will continue to "perform quarterly reviews of the expected business development with respect to all intangible assets, including capitalized development expenses."

Shares of ADVA were listed at $2.87, up 24 cents or 9.16 percent, in Thursday morning trading on the XETRA stock exchange.

For more:
- see the earnings release

Special report: Wireline telecom earnings in the third quarter of 2014

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