Guidance from Infinera (Nasdaq:INFN) for the first quarter was anemic after their weak fourth quarter results, causing Miller Tabak to downgrade the company and slash its price target on them.
Miller says, "We grossly over estimated Infinera’s prospects last year after the three exceptionally strong quarters Infinera posted. The 4Q and now 1Q resets have been jarring. We are very disappointed with the Infinera guidance for 1Q. Management drew down the backlog in 4Q and has experienced weak orders so far in 1Q and described visibility as very low. They sharply lowered revenue guidance to $90-$97 million for CY 1Q from $117 million just reported for CY 4Q. They also noted they would experience 2 points of Gross Margin pressure and spend in front of revenues in order to position for the 2H availability of their 40G PIC...Cutting CY 2012 estimate to $0.43 from $1.00...Stock will likely be under considerable pressure for the next 2-3 quarters."
Miller Tabak downgrades Infinera (INFN) from Buy to Hold. Infinera closed Friday at $7.37, plunging $1.61, or 17.93 percent. Miller Tabak slashed their price target on Infinera from $18 to $8.
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