Ciena starts out the second half of 2021 strong, but supply chain headwinds threaten further growth.
First-quarter 2021 worldwide optical hardware spending was down slightly YoY, Chinese optical hardware spending was down significantly.
It was a big quarter for 600G coherent port shipments and sales to Cloud Operators.
Consistent worldwide results and a new effort to close the coherent gap with DCOs.
More ICE6 trials and wins as Infinera now ships for revenue; 600bps port shipments rebound.
Record Q2 profitability – Sales hit by 10% due to supply chain issues – EMEA continues to rebound
Ciena is well-positioned to return to growth in the second half of 2021 as multiple factors align in its favor.
First quarter optical spending was down compared to the Covid-impacted 1Q20. Packet transport sales, which suffered a year ago from operational issues, increased sharply.
Exceptional optical and packet hardware sales. Significant wins, despite delays in next generation coherent optical technology, will provide momentum for the year.
ICE6 is shipping to customers, while 600Gbps port shipments grow and support for 400Gbps pluggable optics is added to existing systems.
Record Revenue and Orders – North America Rebound Coming – Components Become 10% of Business During Next Three Years
Ciena’s revenue decline this quarter was steeper than our forecast, but the company is poised to grow revenues based on the success of its WaveLogic 5e 5th generation coherent technology.
North American optical and packet transport spending plummeted in North America as Tier 1s concentrated COVID-related capex in the first half of the year.
Infinera originally expected its ICE6 technology to enter the market in the second half of 2020. The company’s current guidance now indicates a 2H21 arrival. Infinera reports a strong order pipeline but has not specified exactly when the first ICE6 will ship for revenue.
Nokia fared better than its largest competitors in 2020 as it ended the year flat YoY but carrying significant momentum – especially in routing – as it heads into 2021.
Juniper exceeded expectations in 2020, a notable feat as the overall market was difficult for switching and routing. Much of the company’s success comes from its recently diversified customer base away from Tier 1 concentration.
Cisco’s transport product line had a tough 2020 as the company introduced new products in the middle of a pandemic. Sales also declined sharply in Q4, reflecting a slowdown in the NA market.
Fujitsu’s revenues shifted from NA to Japan in 2020 as legacy platform revenue has declined. However, the company’s compact modular strategy is taking off in Japan and will grow in NA in 2021.
Ciena’s sales declined last quarter, primarily due to weakness in NA optical sales. Gen5 coherent (800Gbps-capable) port shipments topped 3600 shipped to date.
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.