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JDS Uniphase and Bookham cheer fiber market

They might still be burning plenty of cash, but key fiber-optic component manufacturers Bookham and JDS Uniphase have cheered investors with a positive outlook for the sector.

Two positive notes were sounded in the depressed fiber-optics market for III-V components this week.

First came UK-based Bookham Technology s declaration of an anticipated upturn in revenue from its key customer Nortel Networks.

In the recent past, Nortel has been responsible for over half of Bookham s sales thanks to a supply agreement signed when Bookham acquired Nortel s optical components division.

That agreement expired earlier this year (see related story), with Bookham s revenue taking a substantial hit as a result.

But in its latest earnings statement, Bookham said that it expected a 10-15% rise in revenue in the next quarter, with custom from Nortel returning to historical levels.

The following day, JDS Uniphase, the acknowledged market leader in the sector, said it expected revenue growth of 8-13% in the next quarter after recording its strongest bookings performance since early 2001.

"We continue to see solid indicators of market recovery," was JDSU CEO Kevin Kennedy s assessment of the situation.

Although the future might be looking a bit brighter for those in the fiber-optic market, the immediate past still provides painful reading.

JDSU saw its fiscal 2004 sales drop 6% on the previous year to $636 million, about half of which arose from its communications products group, which makes semiconductor lasers.

That translated to a full-year net loss of $118 million, compared with $934 million in fiscal 2003.

Meanwhile, Bookham, which has altered its fiscal year-end to June from December in anticipation of a change in corporate domicile to the US, made a net loss of $35.6 million on revenue of $38.8 million in its most recent quarter.

Bookham burned through $25.5 million cash as a result. "While we do not underestimate the ongoing challenges faced by the industry, we are encouraged on many fronts," commented CEO Giorgio Anania.

Shares in both companies rose sharply after the announcements, although they remain well down on their peak values early this year.

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