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Infinera (INFN) Q2 Earnings: Is a Disappointment in Store?

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Infinera Corp. (INFN - Free Report) , a leading optical transport network developer, is slated to report second-quarter 2017 financial numbers after market closes on Aug 3.

Last quarter, the company posted a positive earnings surprise of 4.35%. Moreover, earnings surpassed the Zacks Consensus Estimate in each of the previous four quarters, with an average positive surprise of 24.11%.

Let’s see how things are shaping up for this announcement.

Factors at Play

Stiff competition from peers like Lantronix, Inc. in the cut-throat digital optical networking market raises concerns and might hamper the company’s quarterly performance.

The stock has registered growth of 18.3% against the industry’s decline of 7.2% over the past three months.

However, Infinera’s strategic business moves are impressive. These include new launches and alliances. Different network service providers are merging with the company for the deployment of the Infinera Cloud Xpress, both regionally and globally, to reach out to customers with higher scalability and more reliability.

The company recently launched the XTM II, a next-generation packet-optical platform delivering rich Layer 0, Layer 1 and Layer 2 services with high density, low latency and low power consumption. It is optimized for bandwidth-intensive cloud-scale applications at the metro edge.

Infinera’s decision to power, cloud-scale networks should boost its cloud suite. This is likely to help the company improve its top line in the to-be-reported quarter and lend it a competitive edge.

Earlier this year, Infinera collaborated with CenturyLink, Inc. (CTL - Free Report) to deliver 2.5 terabits per second (Tb/s) of super-channel transmission capacity in order to support SCinet at the International Conference for High Performance Computing, Networking, Storage and Analysis (SC16).

Earnings Whispers

Our proven model does not conclusively show that Infinera is likely to beat on earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here as elaborated below.

Zacks ESP: Infinera has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at a loss of 23 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Infinera has a Zacks Rank #4 (Sell). We caution against stocks with a Zacks Rank #4 or 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Infinera Corporation Price and EPS Surprise


Infinera Corporation Price and EPS Surprise | Infinera Corporation Quote

Stocks to Consider

Vishay Intertechnology, Inc. (VSH - Free Report) , from the broader Computer and Technology sector, has the right combination of elements to post an earnings beat when it expectedly reports second-quarter 2017 results on Aug 3. The company has an Earnings ESP of +6.06% and a Zacks Rank #1.

Symantec Corporation (SYMC - Free Report) , also from the same sector, is expected to report first-quarter 2018 results on Aug 2. The company has an Earnings ESP of +16.67% and a Zacks Rank #2.

You can see the complete list of today’s Zacks #1 Rank stocks here.

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