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Alcatel turmoil amid Coherent hope

25 Jul 2002

Increasing orders fuels hope of a recovery at Coherent, but the only way is down for struggling Alcatel Optronics.

First the good news: US laser manufacturer Coherent's order book is filling up. Now the bad news: Second-quarter revenues at French telecoms component maker Alcatel Optronics dropped 28% on the previous period, with the company expecting its third quarter revenues to plummet a further 30%.

Alcatel Optronics chief executive officer Jean-Christophe Giroux explained the pessimism: "Additional turmoil at carriers' level is now very likely to push out the acceptance and deployment of new-generation systems and components."

At only EURO 25.4 million (USD 25.4m), Alcatel Optronics' quarterly revenue was down 83% on last year. Half-yearly sales stand at just one-fifth of the 2001 figure. And with Giroux predicting a further drop of 20-30% in the next quarter, which would take sales below the EURO 20 million mark, the question is how low can Alcatel Optronics go?

A slightly more upbeat note was struck by Coherent, which has all but ditched its passive-components operations for the telecoms market. Although the company registered a quarterly loss of USD 81.1 million, this was mostly due to recording the drop in value of Lumenis shares that Coherent acquired when selling its medical laser division to the Israeli company.

That drop accounted for a charge of almost USD 80 million. At an operational level, Coherent posted sales of USD 95.9 million for its third quarter, slightly down on the previous quarter.

However, Coherent's CEO Bernard Couillaud noted that orders increased by 21% over the previous quarter, with the Lambda Physik division's order book filling up most rapidly. "Our third straight quarter of sequentially higher bookings suggests a modest recovery has begun," he said.

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

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