Telecommunications equipment challenger Infinera (NASDAQ:INFN, news, filings) reported fourth quarter earnings yesterday after the bell. Revenues of $90.2M were up 8% sequentially from the prior quarter, and 5% from the same quarter last year, and the number beat analyst estimates. Net loss per share of $0.07 was also a penny better than expected. Infinera offered Q1 guidance for revenues of $92-94M and a net loss of $0.10-0.11, which were probably both larger than expected. The unnamed internet content provider that was mentioned in the company's Q3 call became a top 10 customer during the fourth quarter as they work through a nationwide roll-out. They also announced a further 6,000 mile transatlantic contract with an existing customer, implying continued traction in the submarine capacity space.
Why then was the stock down 6% today? Probably due to the fact that CFO Duston Williams will be stepping down from the position he has held for four years. He will be replaced by Ita Brennan, who came to Infinera four years ago as well. I don't think the market thinks there is anything fishy going on, it's just that it was only 6 months ago that we learned that CEO and founder Jagdeep Singh would be stepping down in favor of COO Tom Fallon and the change. The market is probably simply waiting to see where the new team takes the company.
Infinera has positioned itself well for a 2010 recovery in the equipment sector, having added many customers during the recession despite cutbacks in spending by carriers. However, their 40G product is still not expected to be available until later this year at the earliest, which means their growth in the short term will likely come from their new submarine and metro products.
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