Jefferies says Calix software business not impacted by current issues

Jefferies analyst George Notter expects shares of Calix to be under heavy pressure today as the company last night reset expectations, noting broadband service provider customers are slowing new network deployments as they look forward to the potential for government stimulus dollars. The company expects the software business to be unaffected by the current issues in the hardware/optical line terminal business, the analyst tells investors in a research note. The gross margin improvement in Q4 “also reinforces the software strength,” says Jefferies. Overall, the firm stills “feel good” about Calix’s software traction despite the “ugly” quarter. It has a Buy rating on the shares with a $75 price target.