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Infinera Corporation Message Board

  • long_term_cap_gains long_term_cap_gains Apr 27, 2013 7:14 PM Flag

    Gross Margins headed towards 45%

    At that level of gross margins, INFN would already be profitable at a revenue run rate of $125M per quarter. Guess what? INFN already hit that revenue run rate, they just need to execute on gross margin improvement, and that is on track to be delivered by next year. Meanwhile revenues keep growing.

    This company will be very profitable. With ALU not being able to compete and dying, INFN is liley to catch a decent piece of ALU's optical revenues which are in the hundreds of million per year. Keep your eyes on this.

    A benefit form ALU being in such trouble and Huawei essentially neutered in the US, pricing pressure has diminished significantly.

    All of the above dictates theat revenues and gross margins will be going up fast.

    Sentiment: Buy

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    • Yep. What analysts are now waiting on is whether more big telecoms, besides CenturyLink, go with the DTN-X in a big way.

      Level3 has been hinting that 100G pricing is close to but not yet price competitive with 10G. They can say that only because they are a fiber-rich telecom and probably prefer to inverse muxing 10G waves to get higher bit rates on their busy routes. It's probably just as well that Infinera can sell both the DTN and DTN-X to various situations. 100G is coming, but not all at once.

13.20+0.14(+1.07%)May 27 4:00 PMEDT