Calix stays hopeful as Q3 revenues rise to $81.3M

Calix (NYSE: CALX) on Thursday won a slight victory as the access vendor reported that Q3 revenue rose 3 percent sequentially to $81.3 million.

However, the news was tempered by the fact that on a year-over-year basis, revenues declined 2.8 percent from $83.7 million from Q3 2011.

The Petaluma, Calif.'s Non-GAAP Q3 net income was $1.8 million, or 4 cents per fully diluted share, down from the $3.6 million, or 7 cents per fully diluted share, it reported in Q3 2011.

GAAP net loss for Q3 2012 was $7.1 million, or 15 cents per basic and diluted share, compared to a GAAP net loss of $6.9 million, or 15 cents per basic and diluted share, for the third quarter of 2011.

Carl Russo, president and CEO of Calix, said in the earnings release that while its revenue decline illustrates the fact that service providers have been either cutting back or delaying purchases due to overall economic concerns, he thinks more growth is coming.

"The modest year-over-year decrease in revenue confirms the challenging macro-economic environment that the entire communications equipment segment has seen," Russo said. "Our 3 percent sequential growth and improving balance sheet, however, point to our strengthening competitive position moving forward."

One move that should drive some growth for the vendor, especially on the international front, was its acquisition of Ericsson's wireline access division. Under the terms of that agreement, Calix was able to add Ericsson's EDA 1500 GPON Optical Line Terminal (OLT) and complementary optical network terminal (ONT) portfolios.

But the real value of the Ericsson acquisition is that Calix will instantly become a major player in key international growth markets, including China, where the Swedish vendor previously won Fiber to the Home (FTTH) deals from China's three major telcos: China Telecom (NYSE: CHA), China Mobile and China Unicom in 2009, for example. However, in China Calix will have to face off with two very strong competitors in Alcatel-Lucent (NYSE: ALU) and Huawei.

While Calix has been gaining ground with a number of smaller competitive international service providers, the Ericsson acquisition immediately broadens its reach into 180 countries worldwide.

Calix was listed at $5.90 in late day trading on the New York Stock Exchange.

For more:
- see the earnings release

Special report: Wireline telecom earnings in the third quarter

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