ADVA Optical Networking reported Q3 2008 revenues of EUR 54.1 million, compared to EUR 61.5 million in Q3 2007 and EUR 52.7 million in Q2 2008. The figure is in line with guidance of between EUR 50 million and EUR 58 million.
IFRS pro forma operating income, excluding stock-based compensation and amortization & impairment of goodwill & acquisition-related intangible assets, came in at EUR 1.3 million in Q3 2008 or 2.4% of revenues, also in line with guidance of between -4% and +4%. This compares to Q3 2007 IFRS pro forma operating income of EUR 4.0 million or 6.5% of revenues, and to Q2 2008 IFRS pro forma operating income of EUR -0.1 million or -0.1% of revenues. The year-over-year pro forma operating income reduction to the largest extent was driven by weaker revenues.
The IFRS operating loss in Q3 2008 was EUR 0.1 million, after an operating income of EUR 1.3 million in Q3 2007. The key driver for this development is the above-mentioned decline of pro forma operating income. In part, the decline is offset by lower scheduled amortization of intangible assets from acquisitions, which amounted to EUR 0.6 million in Q3 2008 after EUR 2.0 million in Q3 2007.
IFRS net income in Q3 2008 amounted to EUR 0.4 million, after a net loss of EUR 1.2 million in Q3 2007. The Q3 2008 net income was largely driven by the factors impacting the operating result described above, by net foreign currency exchange gains of EUR 0.5 million and by an income tax benefit of EUR 0.3 million.
“Our Q3 2008 revenues at EUR 54.1 million came in at about the midpoint of guidance of between EUR 50 million and EUR 58 million, while our pro forma operating income at 2.4% of revenues was at the upper end of our guidance of between -4% and+4% of revenues. This development was driven by variations in regional revenue distribution and in product and customer mix, which led to higher gross margins than originally anticipated, and by slightly higher than expected net capitalization of development expenses. In addition, we saw a significant rise in our operating cash flow to EUR 9.2 million in Q3 2008, fueled by improved working capital management. Consequently, our quarter-end net liquidity rose to EUR 5.4 million, an increase of EUR 4.6 million vs. the previous quarter,” commented Jaswir Singh, chief financial officer of ADVA Optical Networking.
As for its outlook, the company said that based on the volatile macro environment, it expects Q4 2008 revenues to range between EUR 50 million and EUR 58 million.http://www.advaoptical.com
