5 February 2010


Opnext revenue falls a further 6% quarter-to-quarter

For its fiscal third-quarter 2010 (to end-December 2009), optical module and component maker Opnext Inc of Eatontown, NJ, USA has reported revenue of $76.1m. This is up 7.9% on $70.5m a year ago $12.1m, but largely due to the former StrataLight Communications Inc (acquired on 9 January 2009). Compared with $81m last quarter (which had itself been down 5% on the previous quarter), revenue is down a further 6% and at the low end of guidance of $75–80m.

Sales for 10Gb/s and below products has risen 10.4% from $49.9m last quarter to $55.1m, as revenue from 10Gb/s products rose 12.6% (due mainly to increased sales of XFP and 10G data products). Despite rising by 70% from $5.1m a year ago to $16.8m (mainly as a result of the StrataLight acquisition), sales for 40Gb/s and above products are down 40.1% from $28m last quarter, due mainly to a decline in sales of 40Gbps subsystems. Revenues from industrial & commercial products are down 22.2% from $5.4m a year ago, but up 35.5% from $3.1m last quarter to $4.2m.

Cisco Systems Inc, Alcatel-Lucent (ALU), and Nokia Siemens Networks (NSN) each represented 10% or more of revenue (and 54% combined, down from 56% last quarter due to lower 40Gb/s subsystem sales to NSN and Cisco, partially offset by increased 10Gb/s and below sales to Cisco and ALU).

“Last quarter we indicated that we expected to see bifurcation in our markets, with continuing growth in 10G and below, while 40G and above would remain challenged, and that’s what we experienced,” says president & CEO Gilles Bouchard.

On a non-GAAP basis, gross margin has fallen from 24.2% last quarter to 18.5%, due mainly to the lower 40Gb/s subsystem sales. Operating loss was $13.1m, up from $8.2m last quarter due to the reduced gross margin, partially offset by expenses falling by $0.6m.

Excluding $6.5m of payments in connection with the StrataLight Employee Liquidity Bonus Plan, Opnext generated $2.7m of cash from operations. However, after $2.4m of capital expenditure, $2.6m of capital lease payments, and $3.8m of cash used in operations, cash and cash equivalents fell during the quarter by $8.7m, from $155m to $146.3m.

For its fiscal fourth-quarter 2010 (to end-March), Opnext anticipates continued recovery of industrial & commercial business revenues, 10G and below revenues to increase modestly (despite first-calendar-quarter price reductions), and moderate growth in 40G and above business (driven by further growth in 40G modules, new 40G subsystems deployments, and the emergence of 100G). Opnext hence expects revenue to rise by 2.5–9% to $78–83m.

“We are achieving important milestones in our 100G development program, as evidenced by our recent multiplexer chip announcement [first ultra-high-speed SMT multiplexer IC for 100G, announced on 27 January],” highlights Bouchard. “Customers are responding positively to the program and we continue to enter into new 100G partnerships.”

See related items:

Opnext’s revenues depressed by 40G slowdown in US

Opnext halves underlying losses as demand stabilizes

Opnext’s 40Gb/s spike compensates for 10Gb/s inventory burn-off

Opnext’s revenues fall 12% from last quarter

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