Telecoms downturn continues

17 Jun 2002

Financial results from Corning, JDS Uniphase, Nortel and Lucent find the industry still in the grip of a recession.

JDS Uniphase, the Canada-based manufacturer of optical components for telecoms, is to close more sites and cut a further 2000 jobs as the downturn shows no sign of abating.

In its third quarter financial results, covering the three months up to 30 March, the company reported USD 262 million revenues (down 8.5 % from the previous quarter), and an overall loss of USD 4.3 billion. It estimated that sales in the next quarter would be even worse, at between USD 210 million and USD 230 million.

The news came after a raft of similar announcements from the major fiber-optic network companies, most of which recorded sales figures down around 50 % on the same quarter in 2001.

US-based Corning, the world's largest manufacturer of optical fiber, reported sales of USD 898 million compared with USD 1.9 billion a year ago. This was despite increased sales of Corning's non-telecoms products.

Corning also said that while it had sold 10-15 % more fiber this quarter than in the previous one, price pressure means that this will not translate into a rise in revenue.

Corning is also planning further restructuring, with a 12.5 % cut in its workforce predicted. "We expect revenues in the photonics technologies business to continue to be very weak," said the company.

France-based Alcatel Optronics, which makes optical components for telecoms, saw sales plunge 77.5 % from last year to EURO 35.1 million (USD 31.5 million).

A pessimistic Jean-Christophe Giroux, Alcatel Optronics' CEO, said: "Further cuts in carriers' spending make it unlikely that system houses will eventually utilize their existing components inventories, and even more unlikely that they will place significant orders in the near future."

Depsite the pessimism, Giroux added that the company will introduce its first hybrid products, which combine active indium phosphide components with passive planar waveguides, later in the year.

Fiber-optic network builder Lucent Technologies, US, saw quarterly revenues stabilize at USD 3.5 billion. However, it added that further cost reductions would be needed to reach a break-even point, and did not issue an estimate for revenues in the next quarter.

After reporting a similar state of affairs, Frank Dunn, CEO of Lucent rival Nortel Networks, Canada, said: "We expect our customers to continue to limit capital spending. We do not expect a significant downturn or upturn in revenues for the next quarter."

Author
Michael Hatcher is technology editor of Opto & Laser Europe magazine.