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Avanex and JDSU report mixed financial results

Two of the largest fiber-optic component manufacturers, JDS Uniphase and Avanex, have reported sequential revenue growth, but Avanex continues to pile up restructuring charges while JDSU offered a disappointing forecast for the current quarter.
Avanex reported that its revenue for its third fiscal quarter ended March 31, 2004 was $30.1 million, an increase of $3.2 million, or 12 percent, compared with $26.9 million in the prior quarter. In the first quarter of 2003, before purchasing various fiber-optic components businesses from Alcatel and Corning, the company’s revenue was only $5.4 million.

Despite the growth in revenue, Avanex’s net loss has continued to increase from $10.4 million ($0.15 per share) for the first quarter of 2003, to $33.5 million ($0.25 per share) in the final quarter of 2003, to $41.0 million ($0.29 per share) for the March 2004 quarter.

The latest quarterly loss includes a restructuring charge of $9.1 million. In the March quarter, Avanex sold its planar lightwave circuit business in Livingston, UK, integrated the remaining Livingston activities into its operations in Nozay, France, and continued to restructure operations at all other locations. The latest quarterly figures are the first to reflect the discontinuation of the Livingston operation.

Walter Alessandrini, chairman and CEO of Avanex, said that Avanex continues to work towards integrating the Alcatel and Corning businesses acquired last year. “During the March quarter, we sold to over 65 customers worldwide, with three customers each accounting for greater than 10 percent of total revenues,” he said.

"In addition to growing our top-line, we continue to focus on aggressively reducing costs and increasing efficiency in our operations. We also expanded our use of contract manufacturing to lower costs and improve operating flexibility.”

Avanex expects that its revenue will grow by approximately 5 percent higher in the June 2004 quarter.

JDS Uniphase revenue still less than one year ago

JDS Uniphase also reported that its revenue increased in the first quarter of 2004, reaching $161 million, compared with $153 million in the final quarter of 2003. However, the revenue was lower than the $166 million reported in the year-ago period.

The company reported a net loss of $7.3 million ($0.01 per share) for the first quarter of 2004, compared with a net loss of $58.5 million ($0.04 per share) in the prior quarter, and $136.8 million ($0.10 per share) in the first quarter of 2003.

Excluding restructuring and other charges, the net loss for the quarter was $6.7 million, or $0.00 per share.

Kevin Kennedy, JDSU’s CEO, said that the company “sees signs of recovery in our markets” and is focusing on execution and operational improvements.

The Communications Products Group of JDSU represented $79 million, or 49%, of total revenue, with the Commercial and Consumer Products Group (formerly the Thin Film Products Group) representing the remainder.

JDSU disappointed analysts by saying that its net revenue for the June 2004 quarter will be in the range of flat to up 5% on a sequential basis, with a non-GAAP net loss of $0.01 per share.

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