Infinera Shares Dropped: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Motley Fool Rule Breakers pick Infinera (Nasdaq: INFN  ) , an optical networking specialist, fell more than 30% in intraday trading after the company predicted weak fourth-quarter results.

So what: In a conference call following the earnings report, Infinera Chief Financial Officer Ita Brennan warned that Level 3 Communications (Nasdaq: LVLT  ) wouldn't contribute as much to Q4 revenue as it did in Q3, when it accounted for 19% of sales. Global Crossing (Nasdaq: GLBC  ) was the only other customer to account for at least 10% of revenue. Brennan also cited a lack of visibility into the timing of deals in waxing cautious about Infinera's fourth-quarter outlook.

Now what: It's tough to blame investors for selling when they've waited long, painful years for Infinera to pay off. Now, Brennan is asking them to be just a little more patient. I can see the argument: Big deals are hard to time and even harder to predict. I'd wait for further clarity on the health of the sales pipeline before buying more or opening a new position.

Interested in more info on Infinera? Add it to your watchlist by clicking here.

True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community.

Infinera is a Motley Fool Rule Breakers recommendation. Try any of our Foolish newsletter services free for 30 days.

Fool contributor Tim Beyers is a member of the Rule Breakers stock-picking team. He didn't own shares in any of the companies mentioned in this article at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. You can also get his insights delivered directly to your RSS reader. The Motley Fool owns shares of Infinera and is also on Twitter as @TheMotleyFool. Its disclosure policy is at least 10% better than other disclosure policies.


Read/Post Comments (2) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 19, 2010, at 12:42 PM, rothjohn101 wrote:

    Confusing - Is this the same INFN that was upgraded to "Buy First" this morning at

    http://newsletters.fool.com/30/ ?

  • Report this Comment On October 19, 2010, at 12:50 PM, TMFMileHigh wrote:

    @rothjohn101,

    >>Confusing - Is this the same INFN that was upgraded to "Buy First" this morning?

    Yes. This is why you see this notice at the bottom of every article here at Fool.com:

    "True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community."

    I'm recommending patience as others recommend you jump in with both feet. May advice is to weigh each take and see what best suits your time and temperament as an investor.

    Does that help? I hope so.

    Foolish best,

    Tim (TMFMileHigh and @milehighfool on Twitter)

Add your comment.

DocumentId: 1336740, ~/Articles/ArticleHandler.aspx, 7/22/2014 4:19:54 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement