Thursday, July 20, 2017

ADVA's Q2 Revenue Declines 8.3% YoY, Outlook is Trimmed

ADVA Optical Networking reported Q2 2017 revenue of  EUR 144.2 million, down 8.3% YoY compared to EUR 157.2 million for the same period last year. Pro forma operating income in Q2 2017 stood at EUR 9.2 million or 6.4% of revenues, up from EUR 6.6 million or 4.7% of revenues in Q1 2017. This number represents a EUR 5.0 million YoY increase (Q2 2016: EUR 4.2 million) and is also within previously announced guidance.

"These are exciting and turbulent times for our industry," said Brian Protiva, CEO, ADVA Optical Networking. "It's a time of incredible contrasts. On one side, cloud and mobility continue to be mega growth drivers driving demand for more bandwidth. On the other hand, our industry continues to face pricing pressure and fierce competition creating the need for further consolidation. Our bid to acquire MRV Communications will enable us to expand our customer footprint, expand our market leadership in Ethernet access devices and expand our portfolio of packet optical solutions. The combined product portfolio will be supported by our continued commitment to operational excellence providing our customers with response times that are unmatched in the industry. Our world-class engineering team, the agility of our organization and our customer focus give us a solid foundation for further growth and profitability."

"Our revenues are currently developing in a non-uniform way," commented Uli Dopfer, CFO, ADVA Optical Networking. "With the FSP 3000 CloudConnect(TM), we are attracting new customers from different regions and customer segments. However, the current demand from one of our top customers in the ICP segment is still weak and we have not yet been able to design in our FSP 3000 CloudConnect(TM). As a result, the revenue outlook for the remainder of the fiscal year is subdued. Only via a fast and efficient integration of MRV Communications will we be able to stabilize revenues close to last year's level. Owing to the weakened revenue development and the expected takeover of MRV Communications, we will be revising our cost structures and cut back on operating costs."

For Q3 2017, ADVA Optical Networking said it now expects revenues to range between EUR 120 million and EUR 130 million and anticipates a pro forma operating income of between 2% and 5% of revenues.



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