Optical transport systems vendor Infinera Corp. (NASDAQ: INFN) reported revenues of $142.8 million for the first quarter of 2014 ended March 29, at the upper end of its guidance. And company executives expect the current quarter to be significantly better.
The $142.8 million showed improvement sequentially over the $139.1 million of 4Q13 and the $124.6 million earned in the first quarter of 2013. It narrowly missed exceeding Infinera’s guidance for the quarter of $137 million and $143 million (see "Infinera expects a strong start to 2014").
Strong North American traction with telcos, cable MSOs, and Internet content providers drove revenues during the quarter, Infinera executives said. They revealed that Level 3 was one of those customers.
GAAP gross margin also showed improvement. The recently completed quarter saw a GAAP gross margin of 40.9%, slightly ahead of the previous quarter's 40.2% and well ahead of the year-ago quarter's 34.2%.
However, the performance was not robust enough to achieve profitability on a GAAP basis. GAAP net loss was $4.4 million ($0.04 per share). However, that mark also bested 4Q13, when GAAP net loss came in at $10.2 million ($0.08 per share), as well as 1Q13, when GAAP net loss was $15.3 million ($0.13 per share).
On a non-GAAP basis, things looked rosier. Gross margins of 41.8% exceeded guidance as well as the 41.4% of the previous quarter and the 35.9% of the first quarter of 2013. Non-GAAP net income was $4.2 million ($0.03 per share), versus a net loss of $0.2 million ($0.00 per share) sequentially and $7.3 million ($0.06 per share) in the first quarter of 2013.
"Our first quarter performance was exceptionally strong in what is typically a soft quarter for our industry. We are benefitting from the continued investment cycle in 100G and network convergence. The favorable economics of our PIC-based architectures and the operational benefits of superchannels position us as the industry recognized leader in the optical market," said Tom Fallon, Infinera’s CEO. "I remain optimistic about our short-, intermediate-, and long-term opportunity."
Fallon's optimism shone in the company's guidance for the current quarter. Infinera forecasts revenues will fall between $160 million and $170 million. The midpoint would be a sequential increase of 16% and a 19% increase versus the year-ago quarter. Non-GAAP earnings per share should be $0.04 per diluted share, the company added.
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