6 November 2010


Opnext reports higher-than-expected growth, to quarterly record of $86.4m

For its fiscal second-quarter 2011 (to end-September 2010), optical module and component maker Opnext Inc of Fremont, NJ, USA has reported record revenue of $86.4m, up 9.5% on $78.9m last quarter and 6.7% on $81m a year ago (and above guidance of $80–85m).











Of total revenue, Alcatel-Lucent, Cisco Systems Inc and Huawei Technologies Co Ltd each represented 10% or more (47% combined, down from 51% last quarter).

Revenue from sales of industrial and commercial products grew for a fifth consecutive quarter to $7.7m, up 14.9% on $6.7m last quarter and up 148% on just $3.1m a year ago.

Revenue from sales of 10Gbps and below products was $56.5m. As supply constraints improve, this is up 1.2% on last quarter’s $55.8m (due mainly to increased sales of XFP modules) and up 13.2% on $49.9m a year ago (driven by increased sales of XFP and SFP+ modules, offset partially by lower sales of Xenpak and X2 modules).

Revenue from sales of 40Gbps and above products was $22.2m. Although this is down 20.7% on $28m a year ago (due mainly to a drop in revenue from 40Gbps subsystem sales), this is up a huge 35.9% on $16.3m last quarter (due mainly to an increase in sales of 40Gbps and 100Gbps modules). Sales had been expected to be flat during new product ramp-up.

“The strength in 40Gbps and above modules, combined with recent customer and industry analyst forecasts, offers encouraging evidence that the markets we have been investing in — 40G and 100G — are becoming a key growth engine for the optical industry,” comments president & CEO Gilles Bouchard.

Although still down on 24.2% a year ago, non-GAAP gross margin has risen from 20.9% last quarter to 22.2%, despite lower average per-unit selling prices. This is due to the higher sales volumes, a higher mix of 40Gbps and above revenues, lower average per unit material and outsourcing costs, and lower obsolete inventory and warranty charges.

Due mainly to the higher gross margin, non-GAAP operating loss has been cut from $12m last quarter to $9.8m (although this is still higher than $8.2m a year ago). Likewise, although still up on $9.2m a year ago, non-GAAP net loss has been cut from $12.1m last quarter to $10.7m.

During the quarter, cash and cash equivalents fell by $9.4m from $106.9m to $97.5m. This reflects $6.2m of cash used in operations, $3m of capital lease payments and $2.1m of capital expenditure (down from $3.1m last quarter), partially offset by a $1.9m benefit from foreign currency exchange fluctuations.

For its fiscal third-quarter 2011 (to end-December 2010), Opnext expects revenue to rise to $87–92m.

See related items:

Opnext’s growth limited by supply constraints

Opnext to burn cash for next two quarters whilst increasing capacity

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

Opnext’s revenues depressed by 40G slowdown in US

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