Q1 CC notes:
- 3 10% customers in Q1- Level3, Global Crossing, and Motorola. Highlighted business continues with Vonage and Cingular.
- $60M Rev, Book-To-Revenue less than 1.
- Net cash and ST/LT Investments increased $26M to $340M.
- A number of Un-Announced deployments are underway in Europe. Sonus will let the customers announce their service offerings before Sonus announces the new customer.
- GM's will remain in their LT range of 58%-62%. They were a little above 61%.
- 761 employees at EOQ.
- Shipped-And-Billed but not included in DR increased $10M to $15.3M. DR declined about $20M.
- KDDI and T-Systems have yet to show up in revenue, they are still doing these deployments.
Very upbeat and positive call, best yet. Here's Goldman on Sonus.
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SONS (IL/A): Despite continued low qtr to qtr rev. visibility, momentum into 2007 should support a new trading range for shares.
May 9, 2006
Sonus Networks 1Q06 results and the implied 06/07 ramp should support a new trading range for the stock, with potential 15-20% upside based on our CY07 EPS of $0.22. Our upside scenario assumes a multiple expansion from a current mid 20x level to a high 20-low 30x range as sentiment around the topline visibility improves, lending confidence to an expected 40% growth in EPS in 07. While SONS continues to make progress on improving its financial operations related to rev recognition, at this point we believe SONS still has little order and rev visibility on a qtr to qtr basis. However, despite a $20M decline in 1Q def. revs, we believe L/T end demand indicators remain very healthy as evidenced by strong trial activity across multiple regions, an improving European regulatory environment and solid deployment |
