ADVA's Q4 revenue of $390.3 million driven by strong EAD sales

ADVA Optical Networking (XETRA: ADV.DE) reported on Thursday that an increase in Ethernet access sales drove up 2012 revenues 6.2 percent to €330.1 million ($390.3 million).

In addition, International Financial Reporting Standards (IFRS) pro forma operating income increased from €17.3 million ($22.5 million), or 5.6 percent of revenues in 2011, to €21.8 million ($28.4 million), or 6.6 percent of revenues in 2012, a factor the company says is "largely due to revenue and gross margin growth."

On a sequential basis, Q4 2012 revenues were €80.3 million ($104.5 million), in line with the upper half of guidance of €77 million ($100.1 million) and €82 million ($107 million).

Due to lower revenues and an increase in selling and marketing expenses, the German vendor's IFRS pro forma operating income was €4.8 million ($6.2 million) in Q4 2012, or 6 percent of revenues, at the upper end of guidance of between 2 and 6 percent of revenues. ADVA Optical Networking's Q4 2012 IFRS operating income was €4.3 million ($5.6 million), down from €6.7 million ($8.7 million) in Q4 2011.

The vendor forecast that it will report Q1 2013 revenues between €72 million ($93.6 million) and €77 million ($100.1 million) and anticipates pro forma operating income of between -2 and +2 percent of revenues.

Brian Protiva, chief executive officer of ADVA Optical Networking, said in the earnings release that despite seeing strong long-term growth prospects, in 2013 "we are likely to face significant volatility in our market."

Protiva added that he expects the wireless operator community's ongoing movement to LTE "should translate into incremental business for ADVA Optical Networking" by providing revenue opportunities for its optical and Ethernet platforms that would be used by wireless operators and wholesale providers for wireless backhaul.

A particular area that ADVA Optical Networks has excelled in has been in the Ethernet Access Device (EAD) segment. Research firm Infonetics has forecast service providers will spend $5.6 billion on EADs between 2012 and 2016.

Michael Howard, principal analyst for carrier networks and co-founder of Infonetics Research, said that "EFM bonded copper EAD sales were up while fiber and Ethernet over TDM EAD sales were down in the first half of 2012."

For more:
- check out the Infonetics research
- see the earnings release

Special report: Wireline telecom earnings in the fourth quarter of 2012

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