Divergent fortunes for optical hardware makers

Technology is a brutal business – you age publicly, almost like a former heart throb, to an object of pity. Take the case of three optical hardware makers – Ciena, White Rock Networks and Infinera. Ciena hit the skids because of slower than expected sales. The company, once a stock market darling, and the company many VCs like to call their “hit” executed a one-for-seven reverse stock split, hoping that $4 a share companies will look better at $28 a share. Barron’s calls it a “ruse.”

For the quarter, revenue grew 16.3% from the fiscal second quarter to $152.5 million, which was nicely above the Street consensus view of $143.7 million. On the other hand, the company said sequential growth in the fiscal fourth quarter would be “up to 5%,” which of course is a lot less than 16.3%. A 5% increase would boost revenue to $160 million, above the current consensus view of $156.5 million; but the slowdown in not being well received.

Like Ciena, White Rock Networks, a bubble era start-up hit hard times, and shut its doors. The company is apparently looking to sell its assets. Their website is off the air.

“….the email quoted Lonnie Martin, founder and CEO of White Rock, as saying. “Fundamentally, the telecom depression, and all of its residue, took too big and too long a toll on younger entrants like us, and at the end of the day we could not look our investors in the eye a sixth time and convince them that millions more in equity would make our future dramatically better.”

On the other end of the spectrum, Infinera announced that it boosted its share of the 10G long haul optical market in the second quarter. Why? because it makes gear that basically helps reduce the costs – operational and capital – for optical carriers.

According to Dell’Oro data, the top three vendors in 10 Gb/s long-haul shipments in the second quarter were Infinera with a 29.4% market share, Nortel (NYSE: NT) with 16.4% share and Siemens (NYSE: SI) with 11.5% share. In the second quarter, the long-haul DWDM market rose to $455 million. Tough times for Ciena and White Rock are glaring, especially if you take into account that the total optical market rose by 9% to $2.28 billion in the quarter, according to Dell’Oro.

PS: Andrew Schmitt, can you let us know what is really going on in the optical markets? Update: Andrew has posted a fantastic overview. Thanks!