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Infinera Corporation Posted Strong Results – Here’s What to Expect

Infinera

Infinera Corporation (NASDAQ:INFN) share price was under pressure over the last six months. The stock price traded in the range of $6 in the last three months, substantially lower from the 52-week high of $12.50 it hit early in the FY2017.

INFN stock gained some support in Thursday trade following stronger than expected results for the fourth quarter. Infinera stock surged close to 30% after topping the consensus revenue and earnings estimates.

Stronger than Expected Results For Infinera

Its revenue of $195 million in Q4 beats the consensus estimates by $5.54 million. The revenues also increased 8.2% compared to the prior year period. ICE4 products were among the key drivers for strong revenue growth.

Since the launch of Cloud Xpress 2, its ICE4 products sales increased sharply and it accounted for almost 20% of product revenue in Q4. At the end of the latest quarter, the company has 17 customers for ICE4, higher from the level of 10 customers in the previous quarter.

“In Q4 we made some difficult but necessary decisions to reposition the company for crisper execution and increased focus on our go to market strategy,” said Tom Fallon, Infinera’s Chief Executive Officer. “With our full product refresh nearing completion, positive sales momentum ending the year, and a significant pipeline of opportunities, we enter 2018 with confidence that our recent positive revenue trajectory will continue.”

Despite higher revenues, Infinera management needs to do a lot of work on cost-cutting strategies to support margins. It posted a loss of$ 0.50 per share in Q4, higher from the loss of $0.25 per share a year ago.

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Here is What to Expect

On the back of a complete transformation of the business model, the company’s potential to generate a sustainable growth also improved.

There are several reasons for higher growth in FY2018. For instance, Infinera believes that its large cable customers are likely to ramp up spending goals this year. Moreover, its management predicts that their pipeline is strong enough to generate better results than the last year. If the company’s results come in accordance with the estimates, its stock will get a huge support.

Featured Image: twitter

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