It's earnings season -- and it's always M&A season -- so there's plenty of financial action among the optical components firms such as Avago, JDSU, and Oclaro, as well as general industry news, including developments in the UK.
Avago Technologies Pte. has completed the $6.6 billion all-cash acquisition of LSI Corp., a deal first announced in December 2013. Avago, which replaces LSI on the S&P 500, will announce its second-quarter financial results on Thursday May 29. The company's stock is currently trading at a near year-high of $69.13. (See Avago to Buy LSI for $6.6B.)
JDSU (Nasdaq: JDSU; Toronto: JDU) has been engaging in a bit of damage control following its disappointing earnings report, announcing that its laser unit booked record orders in the last financial quarter. Laser sales at $30.9 million were up by more than 17% year-on-year, with the company noting strong demand for its Gen 2 fiber laser and solid state lasers, while the company is positive about the future demand for the high-power lasers it added to the portfolio with the acquisition in January of Time-Bandwidth Products. But lasers only account for about 7% of the company's revenues, and sales in other parts of the business didn't match expectations. While there are hopes that JDSU's numbers will improve as the year goes on, the share price isn't reflecting any such anticipation, as it is languishing at just above $11.00, not far above the year low of $10.29. (See Capex Slowdown Slams JDSU.)
Oclaro Inc. (Nasdaq: OCLR) shares took a hammering last week, losing about 40% of their value to hit $1.46, after the company reported a fiscal third-quarter net loss of $22.9 million on revenues of $95.1 million. The loss looks weighty, but it was an improvement on the $40 million net loss reported a year earlier. In an investors' conference call, CEO Greg Dougherty, who took over in June 2013, admitted the company hasn't integrated its acquisitions well, or made hard product line decisions. The company's workforce has dropped from approximately 3,000 last June to about 1,400 now, but it plans on hiring some new staff to bolster its 100G product developments. The company also been investing in its indium phosphide (InP) facility in Caswell, UK, and introduced a new pilot production line so that it can ramp such new products as InP-based tunable laser assemblies even faster. Oclaro's stock is currently trading at $1.78. (See Oclaro Makes Changes at the Top.)
Finisar Corp. (Nasdaq: FNSR) has been attracting some interesting investment attention. On May 7 traders bought 12,414 put options on the stock, more than five times the daily average of 1,991. Buying a put option protects an investor's existing stock position or acts as insurance if an investor believes the price will drop. Analyst firms have varying opinions on the stock: RBC Capital upgraded the shares from a "sector perform" to "outperform" in late March, while ACI Research downgraded shares to a "sell" rating three weeks earlier. While analyst opinions being varied is nothing really new, the put volume is Finisar's share price currently stands at $23.06.
A new National Dark Fibre Infrastructure Service (NDFIS) funded to the tune of £2.5 million ($4.2 million) by the Engineering and Physical Research Council (EPSRC) will enable a consortium of UK universities to access a dark fiber network via dedicated optical connections. Expectations are that research experiments can more easily take place in such areas as high-order optical modulation or quantum communication. A five-year contract for NDFIS was awarded to a consortium including University College London, and the Universities of Southampton, Cambridge and Bristol. The resulting SDN network, named Aurora2, will also be open to industry partners to test architectures, new communications methods, and new components.
UK-based Fibercore Ltd. just unveiled what it claims to be a unique fabrication capability for multicore optical fibers, allowing for virtually any practical configuration, spacing and number of cores. Data cables for data center and exchange use, for example, are traditionally space guzzlers. With Fibercore's method, the cross sectional cable area can be reduced in size by having eight cores within one fiber, replacing an eight-fiber ribbon to a single fiber cable. Alternatively, eight fibers can be replaced by eight multicore fibers, increasing cable bandwidth by a factor of eight. (See Fibercore Boasts Multicore Fiber Capabilities.)
SDN startup Viptela snuck out of stealth mode, touting a new architecture that the company claims can change the way enterprises deploy and manage their WANs. The company, which closed $33 million in funding from Sequoia Capital in December, has unveiled its Secure Extensible Network (SEN) software-based solution, which integrates routing, security and segmentation in a single solution that, according to Viptela, addresses the shift from client-and-server-based traffic to the new traffic patterns taking shape due to the use of cloud computing.
Re: Light at the end of the tunnel? The normal for transmission companies...or at least those that make the parts having to go with the normal we need more capacity or wait we have too much etc etc. Rollercoasters have nothing on this segment of the industry.
Light at the end of the tunnel? It is always surprising when the optical companies earnings aren't so hot given where the demand should be. Given all of the growth worldwide in 4G, LTE, 5G, etc. optical transport is just going to have to keep growing, so it is probably the old timing issue...who is looking to buy what when, what orders have already been booked, etc. I would think that overall the light should be laser sharp and multicolored at the end of this tunnel.
Light Reading is spending much of this year digging into the details of how automation technology will impact the comms market, but let's take a moment to also look at how automation is set to overturn the current world order by the middle of the century.
Understanding the full experience of women in technology requires starting at the collegiate level (or sooner) and studying the technologies women are involved with, company cultures they're part of and personal experiences of individuals.
During this WiC radio show, we will talk with Nicole Engelbert, the director of Research & Analysis for Ovum Technology and a 23-year telecom industry veteran, about her experiences and perspectives on women in tech. Engelbert covers infrastructure, applications and industries for Ovum, but she is also involved in the research firm's higher education team and has helped colleges and universities globally leverage technology as a strategy for improving recruitment, retention and graduation performance.
She will share her unique insight into the collegiate level, where women pursuing engineering and STEM-related degrees is dwindling. Engelbert will also reveal new, original Ovum research on the topics of artificial intelligence, the Internet of Things, security and augmented reality, as well as discuss what each of those technologies might mean for women in our field. As always, we'll also leave plenty of time to answer all your questions live on the air and chat board.