Infinera (NASDAQ:INFN, news, filings) posted another strong quarter yesterday, again besting expectations as its sales of the new DTN-X platform continue to drive things forward. Revenues were in the upper half of guidance and a bit above expectations, while earnings per share of $0.10 were above the guided range and six cents ahead of composite analyst estimates. However forward guidance was more conservative than the street may have hoped:
|$ in millions||Q3/12||Q4/12||Q1/13||Q2/13||Q3/13||Guidance|
|Non-GAAP Gross Margin %||39%||36%||36%||39%||49%||Q4: ~40%, 2013: ~41%|
|Operating Expenses||59.7||61.8||57.6||60.3||55.8||Q4: 55, 2013: 217|
|Non-GAAP EPS||(0.07)||(0.05)||(0.06)||(0.01)||0.10||Q4: (0.04)-0.00|
The biggest change over the prior quarter was clearly in gross margins, which derived from yield improvements and cost savings as well as a shift in revenue mix toward higher margin sales.
However, the euphoria will be short-lived as the company expects revenues a bit below the expected range, gross margins to drop back to the 40% range for Q4 and for earnings per share to drop back to break-even or below. Adjusting for lumpiness, that will put them roughly where they expected to be for the full year.
Meanwhile, Infinera had some management turnover to share as well. CFO Ita Brennan will be leaving her post as of the end of February, 2014, to pursue another opportunity at a startup after more than seven years with Infinera. The process to find a replacement is now underway.
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