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Infinera Corp. Reports Operating Results (10-Q)

November 06, 2012 | About:
10qk

10qk

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Infinera Corp. (INFN) filed Quarterly Report for the period ended 2012-09-29.

Infinera Corporation has a market cap of $541.7 million; its shares were traded at around $5.09 with and P/S ratio of 1.3.

Highlight of Business Operations:

As of September 29, 2012, we have sold our network systems for deployment in the optical networks of 106 customers worldwide, including Colt, Cox Communications, Deutsche Telekom, Equinix, Interoute, KVH, TeliaSonera, Level 3, NTT, OTE, Pacnet and XO Communications. We currently have 41 customers enjoying the benefits of an ATN platform and 35 of those have deployed an integrated ATN-DTN solution. We do not have long-term sales commitments from our customers. To date, a few of our customers have accounted for a significant portion of our revenue. One customer accounted for over 10% of our revenue in the three months ended September 29, 2012. No customer accounted for over 10% of our revenue in the three months ended September 24, 2011. One customer accounted for over 10% of our revenue in each of the nine months ended September 29, 2012 and September 24, 2011. Our business will be harmed if any of our key customers do not generate as much revenue as we forecast, stop purchasing from us, or substantially reduce their orders for our products.

Total revenue increased to $112.2 million for the three months ended September 29, 2012 from $104.0 million for the corresponding period in 2011. For the nine months ended September 29, 2012, total revenue increased to $310.4 million from $292.9 million for the corresponding period in 2011. Revenues in the three and nine months ended September 29, 2012 were positively impacted by the recognition of revenues from sales our new DTN-X platform in the third quarter of 2012. These revenues included sales to existing customers transitioning their higher capacity network deployments to the DTN-X and new customers purchasing our digital optical network solutions for the first time. In addition, we also deployed the DTN platform with three new customers in the third quarter of 2012. Revenues for the three and nine months ended September 24, 2011 were negatively impacted when customers who required higher capacity network solutions in advance of the availability of our 40 Gbps and 100 Gbps systems purchased competitor products for portions of their networks.

Total product revenue increased to $98.9 million for the three months ended September 29, 2012 from $89.6 million for the corresponding period in 2011. Total product revenue increased to $269.1 million for the nine months ended September 29, 2012 from $256.4 million for the corresponding period in 2011. Product and related support services revenue that is recognized ratably includes sales of products and services that were deferred under previous accounting standards, prior to our adoption of ASU 2009-13 and ASU 2009-14 as further discussed in Note 2, Significant Accounting Policies, to the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K filed on March 6, 2012, because vendor specific objective evidence of fair value had not been established for the undelivered elements. Total ratable revenue decreased to $0.5 million for the three months ended September 29, 2012 from $0.8 million for the corresponding period in 2011. Total ratable revenue decreased to $1.5 million for the nine months ended September 29, 2012 from $2.6 million for the corresponding period in 2011. These decreases were due to an overall reduction in sales of products and services that were deferred following our adoption of ASU 2009-13 and ASU 2009-14.

Total services revenue decreased to $12.9 million for the three months ended September 29, 2012 from $13.6 million for the corresponding period in 2011 primarily reflecting decreased revenue of $1.4 million from deployment services revenue partially offset by increased revenue of $0.2 million from extended hardware warranty, $0.2 million from spares management related services and $0.3 million from training revenue and other services. Total services revenue increased to $39.8 million for the nine months ended September 29, 2012 from $33.8 million for the corresponding period in 2011 primarily reflecting increased revenue of $1.8 million from deployment services revenue, $1.7 million from extended hardware warranty revenue, $1.4 million from spares management services revenue, $0.5 million from training revenue, $0.3 million from first line management services revenue and $0.3 million from managed services revenue. As our installed customer base grows, we expect to continue to grow our extended hardware warranty and spares management services revenues in future periods.

Net cash provided by investing activities in the nine months ended September 29, 2012 was $29.2 million compared to net cash used by investing activities of $12.3 million in the corresponding period of 2011. Investing activities for the nine months ended September 29, 2012 included net proceeds of $51.9 million from purchases, maturities, calls and sales of investments in the period partially offset by $22.2 million of capital expenditures. Investing activities for the nine months ended September 24, 2011 included net proceeds of $15.0 million from purchases, maturities, calls and sales of investments in the period offset by $23.2 million of capital expenditures. We also invested an additional $4.5 million in an existing cost-method equity investment during the third quarter of 2011.

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