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Infinera (INFN) Tops Q4 Earnings & Revenue Estimates

Zacks Equity Research

Leading optical transport network developer Infinera Corp. INFN reported impressive financial numbers in the fourth quarter of 2015 with both the top and the bottom line outpacing the Zacks Consensus Estimate. The stellar quarterly performance was buoyed by increased revenues from both the product and services segments.

The company reported adjusted earnings per share of 16 cents, surpassing the Zacks Consensus Estimate of 14 cents on the back of higher gross profit and operating income. Quarterly GAAP net income stood at $12.6 million or 8 cents a share as compared with net income of $8.4 million or 6 cents recorded in the year-ago quarter.

Quarterly total revenue was $260 million, up 39.6% year over year and also above the Zacks Consensus Estimate of $259 million. Segment-wise, Product revenues were $227 million, up 43.3% year over year. Services revenues totaled nearly $33 million, up 18.6% year over year. Domestic revenues constituted 62% of the total revenue and the remaining 38% was generated from international markets.

In 2015, Infinera generated $133.2 million of cash from operations in comparison with roughly $36 million in 2014. Free cash flow in 2015 stood at $91.2 million.

As of Dec 26, 2015, Infinera had $149.1 million of cash and cash equivalents compared with $86.5 million at the end of Dec 27, 2014. Total debt, at the end of Dec 26, 2015, was $125.4 million compared with $116.9 million at the end of Dec 27, 2014. Meanwhile, the debt-to-capitalization ratio stood at 0.14 versus 0.20 at the end of Dec 27, 2014.

This Zacks Rank #3 (Hold) company, which provides digital optical networking systems to telecommunication carriers, cable operators and other service providers worldwide, is in direct competition with companies like Ciena Corp. CIEN, Alcatel-Lucent ALU and Cisco Systems, Inc. CSCO.

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