Infinera Shares Plunged: What You Need to Know
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of optical networking equipment maker Infinera (NAS: INFN) sold off today, down by as much as 11%, after the company reported third-quarter earnings last night.
So what: Revenue for the quarter plunged by 20% to $104 million, which resulted in an adjusted net loss of $0.09 per share, compared with a $0.11 per share loss last year. Gross margin shrank to 39% from 50% in the prior year's third quarter.
Now what: Forward-looking guidance is also disappointing investors. The company expects a fourth-quarter adjusted loss of $0.08 to $0.12 per share on revenue in the range of $100 million to $110 million. This forecast is lower than the $0.07-per-share loss and $109.4 million in revenue that analysts were looking for. Investors are dumping the shares on the gloomy report, and Citi Investment Research analyst Kevin Dennean believes 2012 will be a transitional year as the company increases marketing and performance expenses.
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