Bookham Turns First-ever Profit
Optical component vendor Bookham has reported a profit for the first time since it went public in 2000, from best-ever quarterly sales.
Revenue for the first quarter of fiscal 2009, which ended on 28 September, was $66.5 million, an increase of 6 percent compared to the fourth quarter of fiscal 2008, and up 23 percent compared to the year-ago quarter.
Net income in the first quarter was $2.2 million, or $0.02 per share, compared to a net loss of $1.9 million last quarter, and a net loss of $11.0 million in the first quarter of fiscal 2008.
Bookham couldn t have got into the black without the improving profit margins in its telecoms division. In fact, it exceeded the company average of 26 percent, performing the best out of all divisions.
On the conference call last night, Bookham chief executive Alain Couder reminded investors that the company s performance confirms what he said a year ago — that higher volume in the Shenzhen, China, facility would deliver improved gross margins, and that the company would start generating a positive income if it reached more than $65 million in revenues.
It s been a long road to profitability for the chip maker, which started out in 1988 as a developer of silicon optical subsystems, before becoming one of the most pro-active consolidators of the industry during the early 2000s.
Unfortunately, thanks to the economy the good times might not carry over to the next quarter, which ends in December. Bookham is forecasting revenues in the range of $57 million to $62 million, which leads to an outlook close to breakeven.
However, Couder pointed out that Bookham has no debt, and the company is prepared for a slowdown. It already took action last quarter to cap expenses across the board, lower its breakeven point, and preserve cash.
“The financial markets will make the downturn a lot deeper, but we were already in a slowdown," Couder told analysts on the conference call last night. “The financial crisis is on everyone s mind today, but even before that we saw the semiconductor equipment market slowdown in the spring, followed by the telecoms test and measurement market in the early summer."
“I expect the downturn to be an opportunity to accelerate consolidation in the industry," Couder added. “For 980 nm pump lasers the industry is down to three or four suppliers, and InP is winning as the preferred technology for photonic integration. We believe that the industry has no more than three or four critical suppliers, and Bookham is one of them."
The vendor expects an inventory build-up at three of its North American customers, which probably includes Nortel, an 18 percent customer in the quarter. However, the build-up will be short-lived, the company said, lasting no more than one quarter for two of the customers, and two quarters for the third customer.
Nevertheless, Bookham continues to expand capacity for tunable laser production, as it predicts further increases in demand volume.