10 February 2010


Emcore revenue recovers a further 5%, driven by space PVs and CATV

For its fiscal first-quarter 2010 (to end-December 2009), Emcore Corp of Albuquerque, NM, USA, which makes components and subsystems for the broadband, fiber-optic, and solar power markets, has reported revenue of $42.4m. This is down 21% on $54m a year ago, but up 5% on the September quarter’s $40.5m (following that quarter’s 5.3% recovery from the June-quarter low of $38.5m).

Photovoltaics revenue was $16.8m (40% of overall revenue, up from 28% a year ago). This is up 12.7% on $14.9m a year ago, and 3% on $16.4m last quarter due to a 14% increase for satellite solar power products (which garnered $120m in orders and purchase agreements in the last year), offset by a decrease for terrestrial concentrated photovoltaic (CPV) products.

Fiber Optics revenue was $25.6m (60% of overall revenue, down from 72% a year ago). This is down 35% on $39.2m a year ago, but up 6% on $24.1m last quarter due mainly to a 25% rise in revenue from the broadband division's cable TV (CATV) product lines (boosting broadband gross margin to 36%).

Overall Fiber Optics gross margin was 16.7%, up significantly from –1.1% a year ago and 13% last quarter (on a non-GAAP basis), due to improved margins across most product lines as well as lower inventory excess and obsolescence charges.

Photovoltaics gross margin was 22.1%, up on last quarter’s 10.6% (non-GAAP), after reversing $2.9m of inventory reserves sold last quarter relating to legacy CPV products.

Total gross margin was 18.9%, up from 12% last quarter (non-GAAP). Operating loss has been cut from $52.5m a year ago and $13.9m last quarter to $11.9m (the firm’s best operating performance since the June 2008 quarter).

During the quarter, Emcore consumed $1.2m in cash from operations, contributing to cash, cash equivalents, restricted cash, and available-for-sale securities falling from $16.9m to $16.5m.

During the quarter, order backlog fell 2% from $62.6m to $61.2m, with Photovoltaics down 11% from $47.7m to $42.3m (due to rescheduling part of a major customer’s shipments beyond Emcore’s 12 month backlog reporting horizon) and Fiber Optics up 26% from $14.9m to $18.9m (the third consecutive quarter-to-quarter increase).

For its fiscal second-quarter 2010 (to end-March), Emcore expects revenue to rise 6–11% to $45–47m (with increases in both Photovoltaics and Fiber Optics).

*With respect to the separation of its Fiber Optics and Photovoltaics businesses, on 3 February Emcore announced that it has agreed to sell 60% of its Fiber Optics business to Tangshan Caofeidian Investment Corp (TCIC, a Chinese non-operating investment firm administered by Tangshan City’s Caofeidian Industry Zone in Hebei Province), creating the Hong Kong-registered joint venture Emcore Fiber Optics Ltd (EFO). TCIC is to pay Emcore $27.8m in cash and provide additional funding of $27m to EFO after closure of the deal (expected within 90 days).

A supplemental agreement with TCIC will see Emcore establish its China terrestrial CPV manufacturing and operations base in Caofeidian Industry Zone, including a commitment by TCIC to provide Emcore with the equivalent of $3.3m in RMB-denominated loans, tax and rent incentives and assistance in developing Emcore’s solar power business in China.

See related items:

Emcore to sell 60% stake in Fiber Optics business for $27.8m

Emcore revenues rebound by 5%, driven by broadband fiber optics

Satellite deals boost Emcore amid $27m write-down

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