Infinera: What spending slowdown?

Optical equipment vendor Infinera is apparently not seeing the same broad carrier spending slowdown related to economic uncertainty that other vendors are reporting.

“We have not seen any significant changes in spending plans to date among customers that we can attribute directly to the economy,” said Jagdeep Singh, Infinera’s CEO, adding, “This could change.”

In addition to adding a new cable MSO customer in the quarter, giving Infinera all five of the country’s top MSOs, Singh reported seeing “significant activity in large, longhaul buildouts in North America…We’re not aware of carriers stopping these buildouts based on macroeconomic concerns.”

Infinera beat expectations for the third quarter and remains on track to see 10% revenue growth this year.

Singh pointed out that Infinera is not a good weathervane for macroeconomic impact on spending trends because its sales are concentrated on a relatively small number of large customers, and a single win or loss among such customers in a given quarter would likely “dwarf” any spending slowdown related to the economy. However, the same could be said for another equipment vendor, Ciena, which lowered its expectations for the year last month based on a slowdown in carrier customers, particularly in North America. One notable difference between the two vendors that could account for this disparity is that Ciena’s business is much more dependent on Bell carriers, while Infinera is more exposed to CLECs and MSOs.

But are there other reasons why Infinera isn’t feeling the same pain as its peers? What do YOU think? (Post a comment below.)

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