Sonus Networks, Inc. (NASDAQ:SONS) Gains On Jefferies Comment


Dallas, Texas 03/19/2014 (FINANCIALSTRENDS) –  Sonus Networks, Inc. (NASDAQ:SONS) shares surged on Monday after Jefferies called the VoIP infrastructure provider “one of the most underappreciated stories in the technology sector today.” The firm reiterated its “buy” rating on Sonus’ stocks and said the communications provider could be on the path to a $10 stock price. The positive comment from Jefferies came after Sonus Networks announced financial targets for 2015 at its investor day meet.

During the meet, the SIP communications company reiterated its guidance for the first quarter and full year of 2014 as previously announced on February 20, 2014. The company said it expects to post about $70 million in revenues in the first quarter of 2014; while for the full year 2014, the revenue guidance is approximately $300 million.

Sonus Networks also announced targets for the fiscal year 2015, saying the company aims to achieve about 10 percent total revenue growth in 2015.

In addition, Sonus targets operating margins of about 10 percent in 2015 “underpinned by revenue growth; steadily improving gross margins, which are aided by a mix-shift to more standards-based products and higher software content; and a gradual reduction in operating expenses as a percentage of total revenue,” the company stated.

“2013 was a transformative year for Sonus whereby our Session Border Controller (SBC) growth engine represented more than 50 percent of our total product revenue, and we turned the corner to profitability on a non-GAAP basis. We expect our two most important growth markets, SBC and Diameter Signaling Controllers (DSC), to show continued strong growth in 2014 and 2015. Our views are supported by independent industry analyst forecasts from Exact Ventures and Infonetics which show an aggregate growth rate for the SBC and DSC markets of between 25-30 percent for these periods of time. These strong market trends, coupled with our total revenue shifting predominately to these growth-related businesses in 2014, underscore our expectation to deliver double digit revenue growth and operating margins of approximately 10 percent in fiscal year 2015,” said Mark Greenquist, chief financial officer, Sonus.

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