Optical Networking Shares Blasted By Infinera’s Bearish Views

Infinera (INFN) shares are getting clobbered this morning on the optical networking equipment provider’s bearish view on the outlook for the fourth quarter – and the company’s comments are dragging the rest of the sector down with it.

As I noted in my post on the company’s results yesterday, Infinera CFO Ita Brennan said on a post-earnings conference call that “many of our existing customers have already completed significant network build-outs earlier this year and are not likely to drive incremental revenue in the December quarter.” Brennan said the company expects Q4 revenue of $115 million to $120 million, with non-GAAP EPS of 2-5 cents a share, below the Street at $132.5 million and 11 cents.

The question the Street is wrestling with is how much of Infinera’s troubles are company specific – and how much they respect a slowdown in overall carrier demand for optical gear. For now, investors are choosing to take the conservative route, and backing away from the entire sector.

In today’s trading:

• INFN is down $4.03, or 32.7%, to $8.30.
• Finisar (FSNR) is down $1.92, or 9%, to $19.36.
• Oclaro (OCLR) is down $1.82, or 10.9%, to $14.93.
• Ciena (CIEN) is down 66 cents, or 4.5%, to $13.88.
  
• Alcatel-Lucent (ALU) is down 16 cents, or 4.3%, to $3.53.
• JDSU (JDSU) is down 63 cents, or 5.2%, to $11.50.
• Opnext (OPXT) is down 5 cents, or 3%, to $1.62.