Adva's Q4 revenues jump 13.8% on enterprise, carrier sales, but profit slips

Adva Optical Networking reported that fourth-quarter 2014 revenue rose 13.8 percent year-over-year to $97.7 million, due to a rise in enterprise network and carrier infrastructure sales, particularly in the Americas and Asia Pacific regions.

However, Adva's net profit dropped to $4.84 million from $9.6 million the year before due to a revision of deferred tax assets. Cash and cash equivalents at the end of the quarter reached a high of of $94.5 million.

The vendor reported that pro forma operating profit rose to $5.7 million from $2.6 million in 2013 thanks to higher revenues, increased income from capitalization of development expenses and increased other operating income.

Adva's movement in the Americas was recognized by Infonetics, which cited it as one of the vendors that benefited from winning deals from data center providers that are looking for high capacity gear to interconnect their facilities.

Andrew Schmitt, principal analyst for carrier transport networking at Infonetics Research, said in its fourth quarter of 2014 (4Q14) and the full-year 2014 Optical Network Hardware report, that the North American optical market "diverged sharply in 2014, with strong results from Adva, Infinera and Ciena balanced by major weakness at traditional vendors like Alcatel-Lucent, Fujitsu and Coriant."

Schmitt added that what helped Adva and others rise in 2014 is they have been diversifying their customer targets and not just focusing solely on the two top service providers: AT&T and Verizon.

Brian Protiva, CEO of Adva, said in the earnings release that besides seeing strong bookings in North America and emerging markets, the company is starting to see indications that Europe's telecom market is starting to pick up again.  

"We are experiencing a strong pick-up in demand with current levels of order book entries reaching an all-time high in Q4 2014," Protiva said. "While Europe's spending levels have been far below trends seen in North America and the emerging markets, we are now seeing signs of the telecommunications industry slowly returning to growth in Europe."

For the full year 2014, the vendor's revenues also increased to $382 million, up by 9.2 percent from $350 million in 2013, with net profit inching up to $10.7 million from the previous year's $9.7 million. Looking toward the first quarter of 2015, the company said it expects to post revenues of $101 million to $107 million.

Shares of ADVA were listed at $3.45, up 10 cents or 2.90 percent, in Thursday morning trading on the XETRA stock exchange.

For more:
- see the earnings release

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

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