Insights

Why Infinera Stock Is Plummeting Today

What happened
Shares of Infinera (NASDAQ: INFN) are sinking in today’s trading. The fiber-optics specialist’s stock was down roughly 17.3% as of 11:15 a.m. ET on Wednesday following a disappointing first-quarter release.
Infinera published its first-quarter results after yesterday’s market close, and sales and earnings for the period fell short of the market’s targets. While the average analyst estimate had called for an adjusted loss per share of $0.04 on sales of $362.6 million, the company wound up posting an adjusted loss of $0.07 per share on revenue of $338.87 million.
Image source: Getty Images.

So what
Infinera’s revenue climbed just 2.1% year over year in the first quarter, and its adjusted gross margin contracted to 36.2%, down from 37.6% in the prior-year period. Management cited the suspension of operations in Russia and supply chain challenges as reasons for the soft sales and margin performances.
The company also swung from posting adjusted net income of $5.7 million in the fourth quarter of 2021 to a $14 million loss in the recently reported quarter, and its guidance was underwhelming. 
Now what
Infinera expects revenue to come in between $330 million and $370 million in the second quarter, representing growth of roughly 3.2% year over year at the midpoint of the target. However, that guidance range also leaves the door open for a significant decline on a sequential basis and a decline from the $338.2 million in sales it posted in the second quarter of 2021. Meanwhile, the company’s midpoint guidance calls for an adjusted gross margin of 36.5% and an adjusted operating margin of minus 2% in the current quarter. 
After big sell-offs, Infinera has a market capitalization of roughly $1.39 billion and is valued at approximately 89% of this year’s expected sales and 40 times expected earnings. 
Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. –

What happened

Shares of Infinera (NASDAQ: INFN) are sinking in today’s trading. The fiber-optics specialist’s stock was down roughly 17.3% as of 11:15 a.m. ET on Wednesday following a disappointing first-quarter release.

Infinera published its first-quarter results after yesterday’s market close, and sales and earnings for the period fell short of the market’s targets. While the average analyst estimate had called for an adjusted loss per share of $0.04 on sales of $362.6 million, the company wound up posting an adjusted loss of $0.07 per share on revenue of $338.87 million.

Image source: Getty Images.

So what

Infinera’s revenue climbed just 2.1% year over year in the first quarter, and its adjusted gross margin contracted to 36.2%, down from 37.6% in the prior-year period. Management cited the suspension of operations in Russia and supply chain challenges as reasons for the soft sales and margin performances.

The company also swung from posting adjusted net income of $5.7 million in the fourth quarter of 2021 to a $14 million loss in the recently reported quarter, and its guidance was underwhelming. 

Now what

Infinera expects revenue to come in between $330 million and $370 million in the second quarter, representing growth of roughly 3.2% year over year at the midpoint of the target. However, that guidance range also leaves the door open for a significant decline on a sequential basis and a decline from the $338.2 million in sales it posted in the second quarter of 2021. Meanwhile, the company’s midpoint guidance calls for an adjusted gross margin of 36.5% and an adjusted operating margin of minus 2% in the current quarter. 

After big sell-offs, Infinera has a market capitalization of roughly $1.39 billion and is valued at approximately 89% of this year’s expected sales and 40 times expected earnings. 

Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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