MRV Communications Inc. (Nasdaq: MRVC), a holding company for several networking startups, today missed Wall Street's expectations for the second time in a year as it reported its fourth quarter and yearly results for fiscal year 2000.

MRV turned in earnings of $4.5 million ($0.06 a share) -- ignoring charges such as non-cash amortization of intangibles from acquisitions and non-cash deferred stock compensation expenses. Its earnings per share number was one cent lower than what was expected by the lone Wall Street analyst still covering the firm.

Add in the ignored charges and MRV lost $45 million ($0.62 a share) for the quarter, which is up from its year-ago loss of $13.1 million ($0.24 a share).

However, MRV's quarterly revenues rose 32 percent to $97.7 million from last year's revenues of $73.9 million. Likewise, its yearly revenues for fiscal 2000 were $319.4 million, compared with year-ago revenues of $288.5 million.

Acknowledging everyone else's conservative outlook, CEO Noam Lotan said MRV expects its revenue growth to be in the 5 percent range for fiscal Q1 of 2001.

Lotan said he believes his company is terribly undervalued on Wall Street, but he failed to give much insight into where MRV’s revenues come from, outside of its Luminent unit (see Luminent's Dull Debut). MRV doesn’t break down the performance of any of its other operating units or portfolio companies.

The only thing investors can easily understand about MRV is that it’s got some moving parts in the access and metro space. Beyond that, the firm’s most interesting quality is its complexity.

MRV owns roughly 90 percent of Luminent Inc. (Nasdaq: LMNE); 100 percent of Optical Access Inc. and NBase-Xyplex; 97 percent of iTouch Communications; 20 percent of Zaffire Inc.; 53 percent of Charlotte's Web Networks Ltd.; 90 percent of Zuma Networks; 35 percent of RedC Optical Networks Inc.; 60 percent of Optical Crossing; 50 percent of All Optical; and 42 percent of Hyperchannel. Other MRV stakes include a 58 percent stake in Broadband Highway; a 9 percent stake in Tellaire; a 35% stake in PhoneDo Networks and a 90% stake in Cimi Networks.

A couple of colorful moments came during the call. One was Lotan’s defense of Zaffire, a startup that recently saw a newly signed customer go out of business (see Zaffire Gets Zapped). Lotan says Zaffire is doing fine, it’s started revenue shipments, and its lost customer didn’t faze the company since it “has several other customers lined up.”

”Rest assured that [Zaffire’s] definitely kicking butt out there,” he said.

Also interesting was MRV’s introduction of Cescomm, an operating unit focused on delivering packet data to mobile phones on 3G networks. Specifically, the company makes a technology that translates data sent from 3G networks to ATM transport networks. The catch is that its technology is only needed after 3G networks have been built.

Cescomm is the second company of MRV’s portfolio to come from its acquisition of CES, a Swiss firm it bought in May 2000. Itouch was also formed when that acquisition was made. Cescomm said it was currently shipping to NTT Docomo and has an annual run-rate of about $25 million.

Prior to its earnings call, MRV shares fell 3.50 (18.7%) to 15.25. In after-hours trading on the Island ECN, the stock inched back up to 15.75 after the call.

-- Phil Harvey, senior editor, Light Reading http://www.lightreading.com