Avanex Cuts Revenue Forecast
Avanex said revenues will be between $40 million and $42 million for the quarter that ends March 31 and that losses would be "slightly greater" than in the previous quarter (see Avanex Lowers Q3 Expectations). Analysts were looking for a $42 million quarter with losses on a par with the previous quarter's 11 cents per share, according to Reuters Research.
For its second quarter, which ended Dec. 31, Avanex reported pro forma losses of $24.4 million, or 11 cents per share, on revenues of $41.9 million.
At press time, Avanex stock had fallen 16 cents (9.6%) to $1.50 in after-hours trading.
It's been a disappointing year for public optics companies already (see Avanex Slips on Tepid Outlook , Bookham Still Bleeding , and JDSU's Q2 Points Downhill). And Avanex's warning comes the same week that CEO Jo Major and other executives had to fend off skeptics at a "State of the Industry" panel preceding the OFC/NFOEC 2005 conference (see Components Competition Is Killing).
Among other issues, audience members asked how Avanex and Bookham Inc. (Nasdaq: BKHM; London: BHM) plan to survive the year, given their dwindling cash. Avanex, for example, held cash and short-term investments of $54.7 million as of Dec. 31 but burned $20.2 million in cash that quarter, not including some one-time charges.
Major noted that Avanex is working on changes to stabilize its situation, including the raising of more capital. "I believe that we have the ability to raise the cash to fully turn it around," he told the audience.
— Craig Matsumoto, Senior Editor, Light Reading