Shares of Infinera (NASDAQ:INFN) tumbled on Wednesday after the networking solutions provider reported mixed first-quarter results. While revenue came in ahead of expectations, the bottom line was worse than expected. Infinera stock was down about 23% at 11:30 a.m. EDT today.
Infinera reported adjusted revenue of $331.4 million, up 12.1% year over year and $13.1 million higher than the average analyst estimate. While revenue was up from the prior-year period, it was down substantially compared with the fourth quarter of last year.
Adjusted earnings per share showed a loss of $0.27, worse than the $0.23 loss in the first quarter of last year, and much worse than a $0.03 profit in the fourth quarter. Adjusted gross margin was 28.3%, down from 35.3% in the same period last year.
CEO Tom Fallon said, "While the macroeconomic environment creates visibility challenges for the second half of the year, we are on track for ICE6 [its sixth-generation Infinite Capacity Engine] delivery this year and remain very optimistic about the opportunity we see for Infinera in the medium and long term, driven by our truly differentiated performance in the fast-growing high-capacity optical market."
For the second quarter, Infinera expects to produce adjusted revenue between $310 million and $330 million, adjusted gross margin between 31% and 35%, and an adjusted operating margin between negative 1% and negative 7%. Adjusted operating margin was a negative 9.4% in the first quarter.
While Infinera was able to outperform on revenue, the company's growing losses were not well received by the market. The small-cap stock is now down about 47% from its 52-week high.