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Optium cashes in on video-fueled subsystem growth

The optical transceiver supplier chalks up a profitable year despite rapid expansion, and predicts more of the same as demand for bandwidth increases.

Optical subsystem maker Optium foresees a 30 percent expansion it in its addressable market over the next year, and says that its own business will grow even faster than that.

This comes on the back of a fiscal year that brought it an 80 percent increase in revenues, to $125.5 million, and a 62 percent increase in headcount.

According to Eitan Gertel, Optium s CEO, the company's success lies in the fact that it is addressing both telecoms and cable access in an increasingly healthy-looking overall market.

“From an end-user perspective, new application drivers such as mobile video, IPTV and HDTV are fueling a robust outlook for the overall industry for the next two or three years,” he said.

Gertel particularly emphasized the importance to the company of the markets for reconfigurable optical add-drop multiplexer (ROADM) and 40 Gb/s subsystems. Optium will begin to expand production on these lines in the next quarter at its Horsham, Pennsylvania, and Eveleigh, Australia, sites, due to forecasted customer demand that exceeds its existing capacity.

ROADM products accounted for seven percent of Optium's $26.8 million revenues in the closing quarter of its fiscal year 2007, doubling sequentially.

40 Gb/s subsystems, whilst delivering their first revenue in the latest quarter, will only hit one percent of Optium's total revenues over the next three months. Despite this, the US firm believes that both 40 Gb/s and ROADM products will make a significant contribution to sales in 2008.

In the quarter ended July 28, Optium recorded quarterly and annual profits of $1.2 and $11.3 million respectively, which will give laser makers hope that Gertel s rosy picture of the optical networking business is an accurate depiction.

However, in the most recent quarter the company s revenues dropped 22.5 percent sequentially due to “timing issues” of orders from its top customers, which does take away slightly from the results otherwise glossy tone.

• Optium s positive financial outlook has been enthusiastically greeted in the beleaguered financial markets, with premarket trading sending its share price soaring 27 percent to $9.18.

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