ACG Research has released its 1Q
Vendor Financial Index report, which delivers independent information about the
sustainability of a vendor or company to help providers assess the risk of
selecting the right vendor to meet their business requirements and to ascertain
a risk level on the stability of the vendor regardless of technology
innovations.
Low-risk vendors for the quarter
are Adtran, Brocade, Cisco, and Juniper. Characteristics of low-risk vendors
include strong revenue outlook, high operating margins because of sales, solid
gross margin and expense discipline, low debt dependency, and high receivable
efficiency ratio. Adtran’s growth continues
with its international business increasing 56 percent year over year. The
company posted strong performance in EMEA and Latin America, attributed to increased
Broadband Access product sales). Brocade,
which is focusing on efficiency, had the highest operating margin in the
industry, 21.5 percent, increasing 43.8 percent quarter over quarter. Cisco’s US commercial and
enterprise orders increased by 10 percent year over year. The company also
posted a high operating margin, increasing 47.3 percent quarter over quarter. Juniper continues to pursue its
restructuring plan, cost cutting initiatives and diversification of revenue
with the goal of increasing efficiency in delivery of services and customer
support.
Cyan, Ciena and ZTE are high
risk, which is characterized by low inventory turnover ratio, revenue decreases
and low value of equity to debt ratio. Cyan’s bottom line continues to be affected by cautious ordering
patterns by its customers. The company, however, continues to enhance its Blue
Planet SDN and NFV software platform, which is attracting positive attention
from the industry. Although Ciena’s revenue
continues to come from sales to a small number of service providers, the
company’s partnership
with Ericsson (for SDN products) should drive international revenues. ZTE’s revenue dropped 9.5 percent
quarter over quarter; the company is focusing on sales of 4G infrastructure in
China and international growth to drive revenue.
For more information
about ACG Research's Vendor Financial Index service or other
syndicated and consulting services, contact sales@acgresearch.net.
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