04 Feb 2011
Shares in the two optical component makers rise sharply on strong demand for high-speed optical communications equipment.
Along with many others in the photonics sector, both Opnext and JDSU have just reported record-breaking quarters from a revenue point of view. Following that, shares in Opnext jumped 30% and JDSU more than 20% in early trading, with the knock-on impact at Finisar – which has yet to report – causing a rise of more than 10%.
JDSU, by far the largest of the three companies thanks to its sizeable business in network test equipment, reported sales of $473.5 million in its second fiscal quarter of 2011, up nearly 17% sequentially from $405.2 million.
The record figure drew an eager response from JDSU’s CEO Tom Waechter, who remarked: “This is an exciting time for JDSU. Our market drivers are strong, our innovation engine and pipeline for new products is robust, and we continue to increase our operating leverage.”
JDSU posted a net income of $23.6 million on the back of the strong revenue increase. Network test and measurement equipment accounted for just under half of its revenues in the latest quarter, with communications and commercial optical products – a broad category including pump diode lasers and transceivers, as well as JDSU’s wider laser portfolio – contributing $191.1 million (of which lasers were $22.7 million). That figure represents a 13.8% increase on the prior quarter.
The company’s advanced optical technologies business unit, which includes products used in gesture computing and banknote security applications, contributed $54.6 million – down nearly 10% on a sequential basis.
Meanwhile Opnext, which was spun off from Japanese technology giant Hitachi a decade ago and still enjoys close co-operation with its parent company, posted sales of $97.1 million in its third fiscal quarter, up 12% sequentially.
The vast majority (>90%) of Opnext’s products are used in optical communications applications, and the company is now witnessing a very strong uptick in demand for its higher-speed modules. Opnext said that revenues from sales of products operating at 40 Gb/s and faster increased by 23.5% sequentially in the latest quarter, reaching $27.4 million – mostly the result of demand for modules.
Opnext also sells components used in commercial and industrial applications – as evidenced by its launch of both a 60 mW, 445 nm blue laser diode and a 500 mW violet (404 nm) source at the SPIE Photonics West trade show in late January, targeted at mobile display and medical applications respectively.
Sales of industrial and commercial products were only $7.9 million in the latest quarter, but that still represented almost double the figure recorded one year ago.
Opnext CEO Harry Bosco welcomed the solid growth seen in the quarter, saying: “At $97.1 million, revenue in the December quarter set another record for Opnext and represented the fourth consecutive quarter of growth. Led by strong 40 Gb/s and above module sales, the growth was broad-based across most product lines.”
Both JDSU and Opnext revealed modest expectations for the forthcoming quarter. JDSU expects quarterly revenues to fall to between $440 million and $460 million, while Bosco projected a marginal uptick to between $97 million and $102 million for Opnext.
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