Leading optical transport network developer, Infinera Corp. (INFN), reported impressive financial numbers in the fourth quarter of 2014. Both the top and bottom lines outpaced the respective Zacks Consensus Estimate. The stellar performance was primarily driven by increased revenues from the international segment. The company also added 10 DTN-X invoiced customers in the quarter. Following the results, the company’s shares rallied over 13% in the after hour trading session yesterday.
Management expects the company’s newly launched Cloud Xpress products and its metro cloud market transition to pave the way for long-term growth. Infinera currently holds a Zacks Rank #2 (Buy).
Coming back to the quarter’s result details, adjusted earnings per share came in at 8 cents, significantly surpassing the Zacks Consensus Estimate of 5 cents. The beat came on the back of higher gross profit and operating income. Quarterly net income stood at $8.4 million or 6 cents a share as against net loss of $10.2 million or 8 cents recorded in the year-ago quarter.
Quarterly total revenue was $186.3 million, up 33.9% year over year and also above the Zacks Consensus Estimate of $182 million. Segment wise, Product revenues were $158.5 million, up 37.7% year over year. Services revenues totaled $27.8 million, up 15.9% year over year. Domestic revenues constituted 58% of the total revenue and the remaining 42% was generated from the International markets.
In 2014, Infinera generated $36 million of cash from operations against $35.2 million in the prior-year period. Free cash flow in 2014 was $12.8 million against $14.1 million in 2013.
At the end of the final quarter of 2014, Infinera had $86.5 million of cash and cash equivalents compared with $124.3 million at end-2013. Total debt, at the end of the quarter under review, was $116.9 million compared with $109.2 million at the end of 2013. Meanwhile, the debt-to-capitalization ratio stood at 0.20 against 0.21 at 2013-end.
Infinera, which provides digital optical networking systems to telecommunication carriers, cable operators and other service providers worldwide, competes directly with companies like Ciena Corp. (CIEN), Alcatel-Lucent SA (ALU) and Cisco Systems Inc. (CSCO). Infinera’s Cloud Xpress system is expected to cut power usage by 50% compared to other metro cloud solutions.
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