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Infinera shares rise on 4Q earnings beat Featured

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Written by  04 February 2012 6390 comments
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Infinera officials said the results were better than they expected and credited them to continued strong demand from cable, tier one and wholesale service providers for the company's digital optical networks.

In addition, Infinera said the development of its recently launched DTN-X optical network platform remains on track, with trials scheduled for this quarter and volume production set to begin in the second quarter. Meanwhile, there is strong customer interest in the platform, the company said.

THE ANALYSIS: Citi analyst Kevin Dennean backed his "Neutral" rating for the stock, saying that while the DTN-X has "significant potential," even if everything goes well, it will be a while before the platform can start generating revenue.

Jefferies analyst George Notter also backed his "Hold" rating for the company.

"We're inclined to wait until we can more closely see the potential revenue momentum from the DTN-X product to get more constructive on Infinera shares," Notter wrote in a note to investors. "The wild card here remains acceptance by Tier 1 operators."

THE SHARES: In heavy afternoon trading, Infinera shares jumped $1.12, or 15.3 percent, to $8.43 after peaking at $8.90 earlier in the day. Over the past 52 weeks, the company's shares have traded between $5.91 and $8.97.

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