Wednesday, July 22, 2009

Riverbed Posts Q2 Revenue of $91 Million

Riverbed Technology reported Q2 revenue of $91.0 million, an increase of 12% from $81.6 million of GAAP revenue reported in the second quarter of fiscal year 2008. The GAAP net loss for Q2 was $290,000, or $0.00 per diluted share. This compares to a GAAP net loss of $869,000, or $0.01 per diluted share, in Q2'08.

"Riverbed has continued to deliver revenue growth in a persistently challenging global economic environment, and the second quarter marks our 14th consecutive quarter of year-over-year top line expansion," said Jerry M. Kennelly, Riverbed president and CEO. "We experienced another strong quarter of new customer additions, ending the second quarter with more than 6,500 customers."

ST-Ericsson Posts Revenue of $666 million; up 18% Sequentially

ST-Ericsson reported Q2 net sales of $666 million and an adjusted operating loss of $165 million. Net sales in the second quarter were higher than normal seasonal patterns and showed a progress of 18.5% compared to first quarter 2009 pro-forma sales. This was mainly due to the higher demand in China - driven by TD-SCDMA- and in the rest of Asia-Pacific and to the alignment of inventory to demand levels across the handset supply chain.

President and CEO, Alain Dutheil, commented: "During the second quarter our sales performed above normal seasonal patterns. This was due to the destocking phase in the channels being over, to the pick-up of demand in China, and to our steady execution on our commitments towards our customers.

"We have kept a strong focus on our restructuring and realignment plans. The $250 million cost synergies program, defined by ST-NXP Wireless in the third quarter 2008, is expected to be completed by year-end according to schedule. The new restructuring plan of $230 million cost synergies, announced at the end of April, has been initiated and is expected to be completed by the second quarter 2010."

TIA Issues Recommendations for National Broadband Plan

The Telecommunications Industry (TIA) issued its set of recommendations for creating a strong National Broadband Plan that will improve lives, enhance innovation, and help restore America's long-term prosperity. The comments filed with the FCC are intended to provide a "Roadmap" with targeted goals over the next three years.

Specifically, the TIA believes that the FCC should work to:

  • enhance efforts to stimulate investment and innovation in next-generation broadband;

  • pursue forward-looking spectrum management and the allocation of additional spectrum;

  • strive to provide communications to all Americans, including low-income Americans and those in rural areas, and persons with disabilities;

  • support open and fair market access for U.S. companies by promoting full, fair and open trade and competition in international markets;

  • foster investment by increasing federal funding, and employing tax credits, expensing provisions, and similar tools; and

  • promote the development of a broadband interoperable public safety network capable of protecting all communities in the event of further domestic disasters.

"The Commission has a unique chance to establish a transparent strategic National Broadband Plan to ensure that all Americans have access to affordable high-quality broadband and to enable ubiquitous consumer adoption of such services. TIA's Roadmap provides practical solutions, action items, and timelines that will swiftly bridge the broadband divide," said TIA Vice President for Government Affairs Danielle Coffey.

Alvarion and Nokia Siemens Networks Expand OEM Deal

Nokia Siemens Networks has expanded an existing OEM agreement to include Alvarion's portfolio of mobile WiMAX solutions. As part of this new agreement, Nokia Siemens Networks will resell Alvarion's latest mobile WiMAX 802.16e solutions to Nokia Siemens Networks' current and prospective WiMAX customers. This includes the Alvarion 4Motion Mobile WiMAX Solution, including the BreezeMAX base stations, ASN Gateways and 4Motion Element Management System. The company will also provide deployment, management and maintenance Services for the products and will leverage its proven multi-vendor capabilities for a most efficient and smooth solution.

SEACOM Enters Service with Terabit Capacity for East Africa

SEACOM's 17,000 km, submarine fiber optic cable system entered into commercial service, linking south and east Africa to global networks via India and Europe with 1.28 Terabit per second (Tbps) of capacity.

Backhauls linking Johannesburg, Nairobi and Kampala with the coastal landing stations have been established and SEACOM is also working with its national partners to commission the final links to Kigali and Addis Ababa shortly. The entire system will be operated and controlled through SEACOM's Network Operations Centre which is based in Pune, India.

The SEACOM system was designed and installed by Tyco Telecommunications.

"Today is a historic day for Africa and marks the dawn of a new era for communications between the continent and the rest of the world. Our tireless efforts of the past 24 months have come to fruition, and we are proud to be the first to provide affordable, high quality broadband capacity and experience to east African economies. Turning the switch ‘on' creates a huge anticipation but ultimately, SEACOM will be judged on the changes that take place on the continent over the coming years," commented Brian Herlihy, SEACOM's CEO.

Inauguration events are being held in South Africa, Tanzania, Kenya, Uganda and Mozambique, where SEACOM, in conjunction with Cisco Systems, will provide media and invitees direct access to true broadband connectivity, carry out live broadcasts and interactive real-time presentations across the system.

SEACOM is a Mauritian company owned 75% by African investors as a collaboration between East and Southern Africans and owns 100% of the SEA International Cable.
  • Tata Communications has become an anchor tenant customer on the privately owned SEACOM cable system, enabling the company to provide fully integrated network services from South Africa, Mozambique, Tanzania and Kenya to its networks in Europe, Asia and India. Another subsidiary company, Tata Communications Transformation Services Limited (TCTS), has been awarded the network administration, operations and maintenance contract of the cable supporting 1.28 Tbps of capacity.

    Tata Communications operates the landing point in Mumbai while Neotel will manage the landing point in South Africa. As result of this, the company can provide seamless connectivity between the SEACOM cable system and the Tata Communications global network, along with Neotel's converged network in South Africa.

AT&T Posts Strong Wireless Growth

AT&T reported Q2 revenues of $30.7 billion, compared with $30.9 billion in the year-earlier quarter, as growth in wireless and advanced wireline data services in large part offset pressures from the macro-environment, including revenue declines in voice and legacy data products.

Compared with results for the year-earlier quarter, AT&T's operating expenses for the second quarter of 2009 were $25.2 billion versus $24.3 billion; operating income was $5.5 billion versus $6.6 billion; and AT&T's operating income margin was 17.9 percent, compared with 21.3 percent.

Net income attributable to AT&T totaled $3.2 billion versus $3.8 billion in the year-earlier quarter, and earnings per diluted share totaled $0.54, compared with $0.63 in the second quarter of 2008.

Some highlights for the quarter:


  • Postpaid Subscriber Gains. Retail postpaid net adds totaled 1.2 million, up 29.0 percent versus results in the year-earlier second quarter and up 31.8 percent versus the first quarter of 2009. This marked AT&T's fourth consecutive quarter with a double-digit year-over-year improvement in postpaid net adds. Total wireless subscribers, which include prepaid and reseller results in addition to postpaid, increased by 1.4 million in the second quarter to reach 79.6 million, up 6.7 million over the past year.

  • Subscriber Churn. Average monthly postpaid churn improved to 1.09 percent, the lowest level in the company's history; postpaid churn was 1.10 percent in the year-earlier second quarter and 1.20 percent in the first quarter of 2009. Total wireless subscriber churn reached a record low at 1.49 percent, down from 1.64 percent in the year-earlier quarter and 1.56 percent in the first quarter of 2009.

  • 2.4 Million iPhone Activations. On June 19, AT&T began offering Apple iPhone 3GS, the fastest, most powerful iPhone yet, and immediate customer response was positive. The day of the launch was the best sales day ever for AT&T's retail stores, and experienced its largest order day ever on that day. For the full second quarter, AT&T iPhone activations totaled more than 2.4 million, with more than a third of those activations for customers who were new to AT&T.

  • Integrated Devices. AT&T offers a wide variety of integrated devices that bring advanced functionality to subscribers, ranging from advanced multifunction handsets for business customers to quick messaging and social networking devices. Including iPhone, the total number of 3G integrated devices in service on AT&T's network increased by more than 3.5 million in the second quarter. Over the past year the number of postpaid integrated devices on AT&T's network has more than doubled, and at the end of the second quarter, 36.0 percent of AT&T's 62.1 million postpaid subscribers had integrated devices.

  • Wireless Data Revenue Growth. AT&T's wireless revenues from messaging, Internet access, access to applications and related services increased $934 million, or 37.2 percent, versus the year-earlier second quarter. Data represented 28.7 percent of AT&T's second-quarter wireless service revenues, up from 22.9 percent in the year-earlier quarter and 17.3 percent in the second quarter of 2007. Wireless text messages on the AT&T network exceeded 108 billion, more than 1 billion text messages a day and nearly double the total for the year-earlier quarter. Internet access, data access and media bundle revenues also continued their strong growth. The number of 3G LaptopConnect cards on AT&T's network increased by nearly 50 percent over the past year to 1.4 million.

  • Postpaid ARPU Growth. Driven by strong data growth, postpaid wireless subscriber ARPU increased 2.3 percent versus the year-earlier quarter to $60.21. This marked the sixth consecutive quarter AT&T has posted a year-over-year increase in postpaid ARPU and the first time postpaid ARPU has topped $60. Postpaid data ARPU reached $17.72, an increase of $3.66 over the year-earlier quarter and up $1.24 from the first quarter of this year. Total service ARPU, which includes reseller and prepaid results in addition to postpaid, grew 0.2 percent versus the year-earlier quarter and was up 1.2 percent sequentially.

  • Wireless Margins. AT&T's second-quarter wireless operating income and margins reflect solid revenue growth of 10.1 percent and strong operational execution in network and support systems, offset by increased acquisition costs from the company's iPhone 3GS launch. AT&T iPhone subscribers, both new customers and upgrades, take two-year contracts with data packages. As a result, robust iPhone demand drives strong recurring revenues and substantial long-term value. Versus results for the year-earlier second quarter, wireless operating expenses totaled $10.1 billion, up 12.5 percent; operating income was $3.2 billion, up 2.8 percent; and AT&T's wireless operating income margin was 23.8 percent versus 25.5 percent in the year-earlier quarter. AT&T's second-quarter wireless OIBDA service margin was 38.3 percent, compared with 41.2 percent in the year-earlier quarter. (OIBDA service margin is operating income before depreciation and amortization, divided by total service revenues.) AT&T estimates that without increased acquisition costs associated with the iPhone 3GS launch, its second-quarter OIBDA service margin would have been more than 40 percent, in line with results for the second quarter of 2008 and the first quarter of 2009.


  • AT&T U-verse Growth. AT&T U-verse TV subscribers in service increased by 248,000 in the second quarter to reach 1.6 million, up more than 1 million over the past year. This growth reflects the high quality of the AT&T U-verse video experience, which offers a host of advanced features, including AT&T U-verse Total Home DVR, integrated voice and broadband service and at least 100 High Definition channels in all markets. U-verse TV's broadband attach rate continues to run above 90 percent, and its U-verse Voice attach rate was more than 65 percent in the second quarter. More than 75 percent of U-verse TV subscribers have a triple- or quad-play option from AT&T (adding broadband, wireline voice and wireless). AT&T's total video subscribers, which combine the company's U-verse and bundled satellite customers, reached 3.8 million at the end of the second quarter, representing 13.8 percent of households served.

  • Broadband Net Adds. Total AT&T U-verse broadband subscribers nearly tripled over the past year to reach 1.6 million, and growth in stand-alone broadband continues to be strong. These factors drove a substantial year-over-year improvement in net adds as AT&T's wireline broadband connections increased by 112,000 in the second quarter. This was up from net adds of 46,000 in the year-earlier second quarter, with both quarters reflecting typical seasonality. Total broadband connections, which include wireline subscribers and wireless customers with 3G LaptopConnect cards, increased by 209,000 in the second quarter to reach 16.9 million in service. In addition to AT&T's high-quality wireline and wireless options, broadband subscribers also benefit from access to AT&T's industry-leading Wi-Fi footprint, enabling customers to take advantage of broadband connectivity in more than 20,000 hot spots in the U.S. and in more than 100,000 hot spots around the world.

  • Consumer Revenue Connections. Combined, wireline consumer broadband and TV connections increased by 363,000 in the second quarter and 1.9 million over the past year. AT&T U-verse Voice connections increased by 176,000 in the quarter and 539,000 over the past year. These trends are reflected in a second-quarter sequential decline in consumer connections (retail voice, high speed Internet and video) that was nearly 40 percent smaller than the decline in the year-earlier quarter, with both quarters impacted by typical seasonality. AT&T had 46.3 million total consumer connections at the end of the second quarter, compared with 48.4 million at the end of the second quarter of 2008 and 46.8 million at the end of the first quarter of 2009. Total wireline consumer customer revenues were $5.4 billion in the second quarter, compared with $5.7 billion in the year-earlier quarter and essentially flat, down only $11 million, versus the first quarter of this year. This marked the company's smallest sequential decline in consumer revenues in seven quarters.

  • 17.0 Percent Growth in Wireline IP Data Revenues. AT&T posted its sixth consecutive quarter of mid-teens growth in total wireline IP data revenues, driven by expansion in AT&T U-verse services and growth in business products such as VPNs and voice over IP. Increased AT&T U-verse TV and broadband penetration with a greater number of triple- and quad-play customers drove 29.7 percent year-over-year growth in consumer IP revenues in the second quarter, and AT&T posted its sixth consecutive quarter of year-over-year growth in consumer wireline revenues per household, up 2.1 percent. Total wireline data revenues grew 5.2 percent to $6.6 billion, led by a 17.0 percent increase in revenues from IP-based services. IP services now account for 48.3 percent of AT&T's total wireline data revenues, up from 43.4 percent in the year-earlier second quarter and 39.3 percent in the second quarter of 2007.

  • Business Strategic Services. Revenues from the new-generation capabilities that lead AT&T's most advanced solutions -- including Ethernet, VPNs, hosting, IP conferencing and applications services -- grew 15.2 percent year over year. Progress in these areas reflects the strength of AT&T's network and its advanced product sets for business customers. Total second-quarter wireline business customer revenues -- which include results from enterprise, wholesale, government, education, medical and small/midsize customers -- totaled $10.6 billion versus $11.2 billion in the year-earlier quarter and $10.7 billion in the first quarter of this year, reflecting economic impacts.

Indonesia's Bakrie Telecom Selects NEC + Juniper for IP Upgrade

PT Bakrie Telecom, Tbk, one of the Republic of Indonesia's leading providers of fixed wireless access services, has selected NEC to upgrade its IP backbone. Under the contract, NEC will provide a full-turnkey based communications system that includes multi-service edge routers and equipment installation. NEC will be supplying Juniper's routing gear. Financial terms were not disclosed.

Lockheed Martin Develops Submarine Communications System

Lockheed Martin completed a key systems requirement milestone in its effort to deliver a Communications at Speed and Depth (CSD) capability for U.S. Navy submarines. The capability will enable secure, two-way communications between submarines operating below periscope depth and at tactical speeds with surface ships, aircraft and land-based assets. All classes of U.S. Navy submarines will be equipped with this transformational capability.

The Lockheed Martin-led industry team, which includes Ultra Electronics Ocean Systems and ERAPSCO, a joint venture between Sparton Electronics Florida, Inc. and Ultra Electronics - USSI, will deliver three types of two-way communications devices and associated submarine and shore equipment. Two of the devices - the tethered expendable communications buoy (TECB) Iridium system and the TECB-UHF system - are launched from submarines. The third is an acoustic-to-RF Gateway (A2RF) system that can be launched from submarines and aircraft.

PMC-Sierra Reports Q2 Revenue of $123 Million, up 20% Sequentially

PMC-Sierra reported Q2 net revenue of $123.2 million, an increase of 20% compared to $102.6 million in the first quarter of 2009 and 12% lower than net revenues of $139.8 million reported in the second quarter of 2008. Net income (GAAP) was $7.8 million (GAAP diluted earnings per share of $0.03) compared with a net loss of $3.9 million (GAAP loss per share of $0.02) in the first quarter of 2009 and net income of $135.9 million (GAAP diluted earnings per share of $0.60) in the second quarter of 2008.

"In the second quarter of 2009, we benefited from a solid ramp in our new 6Gb/s SAS RAID-on-Chip device at H-P and improved demand in our Fiber-To-The-Home business," said Greg Lang, president and chief executive officer of PMC-Sierra. "Continued cost control allowed us to achieve the same level of non-GAAP net income as in the second quarter of 2008 but on revenue that was 12% below the peak level last year."

Broadcom Reports Q2 Revenue of $1.040 Billion, Up 22% Sequentially

Broadcom Corporation reported Q2 revenue of $1.040 billion, up 21.9% compared with the $853.4 million reported for the first quarter of 2009 and a decrease of 13.4% compared with the $1.201 billion reported for the second quarter of 2008. Net income (GAAP) was $13.4 million, or $.03 per share (diluted), compared with GAAP net loss of $91.9 million, or $.19 net loss per share (basic and diluted), for the first quarter of 2009, and GAAP net income of $134.8 million, or $.25 per share (diluted), for the second quarter of 2008.

On April 26, 2009, Broadcom and QUALCOMM Incorporated announced that they had entered into a settlement and multi-year patent agreement. Under the agreement, QUALCOMM will pay Broadcom $891.2 million over a four-year period. In connection with this agreement, Broadcom recorded a $65.3 million gain on settlement and $67.3 million of licensing revenue in the three months ended June 30, 2009.

"Despite the continued global economic uncertainty, Broadcom's results for the second quarter reflected a return to a more stable ordering pattern and the ramp of new products from our end customers," said Scott A. McGregor, Broadcom's President and Chief Executive Officer. "In the second quarter, Broadcom generated strong sequential revenue growth, with product revenue near the top end of the range provided in April. We are pleased that research and development and selling, general and administrative expenses once again increased less than anticipated from the first quarter of 2009, reflecting our continued focus on maintaining solid financial discipline. In addition, we generated strong cash flow in excess of $325 million from operations."

Juniper Posts Q2 Revenue of $786.4 million, up 3% Sequentially

Juniper Networks reported preliminary Q2 revenue of $786.4 million, up 3% from $764.2 million reported in the first quarter of 2009 and down 11% on a year-over-year basis. Net income (GAAP) was $14.8 million, or $0.03 per diluted share, and non-GAAP net income of $103.8 million, or $0.19 per diluted share.

"We continue to take a disciplined approach to controlling operating expenses as we navigate this challenging economic period," said Kevin Johnson, Juniper's chief executive officer. "With service provider sales relatively flat quarter-over-quarter, our sequential revenue increase was supported by double digit quarter-over-quarter growth in the enterprise market. A solid product portfolio, compelling value proposition, and improved sales and marketing execution are enabling us to expand and diversify our customer base."

Juniper's operating margin for the second quarter of 2009 increased to 12.2% on a GAAP basis from 10.6% in the first quarter of 2009, and decreased from 18.3% in the prior year second quarter. Non-GAAP operating margin for the second quarter of 2009 increased to 18.1% from 16.4% in the first quarter of 2009 and decreased from 23.6% in the prior year second quarter.