Preliminary 1FQ21 Results: Revenues In Line with Company and Consensus Expectations



KEY POINTS
  • Supply chain issues were the likely cause of the 2% drop in Infinera’s stock the day after the company reported revenue in line with company and consensus expectations and a smaller than expected loss per share.
  • While the company is expecting the second half of 2021 to see a “more meaningful revenue ramp,” the additional R&D the company is planning will likely hurt profitability.
  • Positive trends include a lessening of competition from Huawei, a build out of the 400G metro market, and the commercial shipping of its 800G ICE6 products to customers.
  • The semiconductor industry supply issues are a concern to some investors who were on the call, but the company believes it can grow faster than its market, which it sees growing 2-3% in 2021 versus 2020.
  • The midpoint of the F2Q21 revenue guidance of $345 million is slightly above consensus of $343. The company pointed investors to its upcoming analyst day for a better view into its long-term expectations.
  • The stock is trading at a forward P/S of 1.14x, slightly below its two-year high P/S of 1.54x back in January.
  • Read our initiation and other reports on Infinera on our website and join us for our upcoming 800G expert call with 650 Group on May 14, which will be before the company’s analyst day on May 19.
COMPANY OVERVIEW

Infinera provides optical transport networking equipment, software, and services to telecommunications service providers, Internet content providers (ICPs), cable providers, wholesale and enterprise carriers, research and education institutions, enterprise customers, and government entities across the globe. The company's portfolio consists of the Infinera DTN-X Family, the Infinera DTN platform, the Infinera Cloud Xpress Family, the Infinera XTM Series, the Infinera XTG Series, and the Infinera FlexILS platform, addressing long-haul, subsea and metro networks end to end. Its technology includes Infinera Intelligent Transport Network Architecture, Infinera Photonic Integrated Circuits, Infinera FlexCoherent Processor, Super-Channels, Sliceable Photonics, Disaggregation, Integrated Digital Switching, Infinera Instant Bandwidth, Infinera Packet-Optical Transport, Multi-layer Switching and Optimization, and Management, Control and Security.

Supply chain issues were the likely cause of the 2% drop in Infinera’s stock the day after the company reported revenue in line with company and consensus expectations and a smaller than expected loss per share.

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