European operators resumed purchases of optical and packet transport hardware in 3Q20 as COVID-related supply chain and operational delays eased.
Third quarter results were better than forecast, especially in EMEA where both optical and packet hardware spending increased. North America spending declined while China spending was flat and Japan spending growth continued unabated.
Cisco’s results and forecast this quarter were more optimistic than last quarter. Optical and packet sales slowed, but an uptick at the end of the quarter hinted at a better than expected finish for the year.
Nokia had an extraordinary Q3, with overall growth significantly higher than the market. Much of this growth came from Q2’s delayed sales.
Infinera’s optical and packet sales grew in Q3 and the company set expectations for continued growth in Q4, running counter to earlier industry forecasts of a slowdown in the second half.
Juniper defied forecasts of a flat to down second half of 2020 by posting one of its best growth quarters in recent history in Q3.
Ciena’s healthy 3rd quarter performance was overshadowed by expectations of a pandemic-induced slowdown for the next few quarters.
Second quarter results were mixed. Forecasted growth in Q2 from sales pushed out of Q1 did not materialize as anticipated and carriers indicated that annual CapEx will not be increased – suggesting a flat to down second half of the year.
Delayed order fulfillment due to COVID supply chain impact earlier this year didn’t materialize as expected.
Cisco reported a sharp decrease in orders across the company, although the decline in orders from service providers (-5%) was milder than other areas.
Despite ongoing operational issues due to COVID, increasing operator demand drove Infinera’s optical sales this quarter, and the company expects an even stronger second half.
Nokia reported rising demand from customers but a continued COVID impact on the supply chain, resulting in a down quarter in almost every region and product segment.
ADVA reported YoY growth in the second quarter but retracted guidance for the rest of the year, a narrative that will be echoed by many vendors in Q2.
Ciena expects to generate revenue growth of 2-4% in a flat (ex-China) market in 2020, implying declines YoY for optical sales in the second half of the year.
Vendors generally claimed a 5-10% reduction in sales due to COVID-19 operational issues this quarter. While demand increased, the inability to get parts, manufacture equipment, and deliver to end customers reduced sales in all areas.
The effects of COVID-19 simultaneously catalyzed demand for transport equipment and paralyzed supply chains worldwide during the first quarter of 2020.
On the Q1 earnings call, Infinera CEO Tom Fallon emphasized that margins were “compressed” by the inability to ship higher-margin new technology to offset of the lower-margin 200Gbps optics.
Vendor summary reports focus on the most recent quarterly financial results and items of interest for select vendors. This report covers Cisco’s 1Q20 results.
Vendor summary reports focus on the most recent quarterly financial results and items of interest for select vendors. This report covers Nokia’s 1Q20 results.
Vendor summary reports focus on the most recent quarterly financial results and items of interest for select vendors. This report covers ADVA’s 1Q20 results.