Optical components

Bookham Basks in 'Cramer Effect'

Bookham Inc. (Nasdaq: BKHM; London: BHM) released earnings today, but who cares? The company's U.S. shares were up 22 percent hours before the numbers were released.

Oh, but wait -- earnings results do count. Bookham's second-quarter net income missed analyst estimates slightly, and its third-quarter forecast was unexpectedly glum.

The result? Shares climbed as high as $8.49 before settling down, closing up 84 cents (12%) at $7.80. In early after-hours trading, the stock was back down 55 cents (7.1%) to $7.25.

For the run-up, Bookham apparently owes thanks to Jim Cramer, whose Mad Money TV show -- essentially one continual rant packed with a catch-phrase density rivaling ESPN's Sportscenter -- has become a favorite among day traders, investors, and New York media types.

Cramer has been a fan of JDSU (Nasdaq: JDSU; Toronto: JDU) for some time, and yesterday, he showered his favor on Bookham, saying the stock was undervalued. Some of his enthusiasm came from Bookham's recent deck-clearing moves to erase long-term debt, which irritated investors in the short term but supposedly strengthened the balance sheet for the long run. (See Bookham's Gain Causes Pain.)

It's become routine for a stock to rise after getting a Cramer recommendation. Given that Bookham trades few shares each day -- about 600,000, compared with 3.6 million for Avanex Corp. (Nasdaq: AVNX) -- investors were able to send the stock skyrocketing.

For its second quarter, which ended Dec. 31, Bookham reported losses of $11.9 million, or 28 cents per share, on revenues of $60.7 million, compared with GAAP losses of $535,000, or 2 cents per share, on revenues of $62.6 million the previous quarter.

For its second quarter a year ago, Bookham reported losses of $41.1 million, or $1.23 per share, on revenues of $45.8 million.

Bookham's non-GAAP losses of $8.3 million, or 19 cents per share, were a penny worse than the consensus analyst forecast of 18 cents per share, according to Reuters. But Bookham's revenues were slightly better than the $59.5 million analysts had expected.

Where Bookham disappointed was in its third-quarter forecast, calling for revenues between $51 million and $54 million, missing the analysts' mark of $58.6 million.

On Bookham's conference call with analysts today, executives didn't explain the shortfall during their prepared comments. Bookham was expected to lose some revenues from Nortel, which is making last-time buys on certain older components as part of the companies' renegotiated contract. (See Bookham Soars on Nortel News.) But analysts already knew that and presumably included that decline in their forecasts.

The Nortel last-time orders should trickle down to nothing by the end of the June quarter, Bookham officials said.

— Craig Matsumoto, Senior Editor, Light Reading

Pete Baldwin 12/5/2012 | 4:07:30 AM
re: Bookham Basks in 'Cramer Effect' I get the feeling it's routine for stocks to do this up-and-down thing after a Cramer mention. Haven't tracked enough of them myself... anybody know for sure? I would expect the stock to spike in the morning, then tail off as everyone takes profits from the spike.

Our Webmaster, Warren, got me interested in Cramer's show. It's fun stuff, although I haven't taken the time to watch for a while.

Cramer really despises telecom ... or used to, anyway. He seems giddy that Bookham and JDSU *supply* telecom but steers clear of the equipment guys.

A caller asked him about Sonus once. Oh, man. Cramer went off, pounding the "Sell" button or whatever it is, screaming: "You will NOT catch ME in the LA BREA TAR PITS of *TELECOM*!!!" It was hilarious.
Belzebutt 12/5/2012 | 4:07:29 AM
re: Bookham Basks in 'Cramer Effect' That guy must be on ecstasy during the whole show, I have no idea how else he could keep on ranting like that for one hour. I watched it a couple of times and I got tired just watching him.
DZED 12/5/2012 | 4:07:28 AM
re: Bookham Basks in 'Cramer Effect' Fools do seem to follow fools. I wonder how much Cramer got paid.

Q1 Revenue 62.6m
Q2 Revenue 60.7m
Q3 Projected 51-54m

Can anyone spot a trend here? I thought optics started taking off about a year ago. Huawei is doing OK.

With real cashburn at $20m per quarter (unless they can find another Creekside) its 4 quarters to go.

deauxfaux 12/5/2012 | 4:07:27 AM
re: Bookham Basks in 'Cramer Effect' I am astonished at how much BKHM's share price has gone up....and how little the fundamentals have changed.

Under the waterline, a great deal has changed. NT has gotten back a great deal of cash, and at the current price, will make a nice profit on its notes that were converted to equity. I am certain that NT will now start to liquidate its position.

With that done, and more and more MSA parts being substituted for the legacy HPOCs parts each day, it is clear that NT will finally be able to force BKHM to stand on its own two feet.

Will BKHM stand or fall? I am betting the latter.
atmforever 12/5/2012 | 4:07:27 AM
re: Bookham Basks in 'Cramer Effect' Well Cramer's fans are day traders - they hope for a short term lift and dump to make money. I guess for many of them a quarter is very long term.
Pete Baldwin 12/5/2012 | 4:07:10 AM
re: Bookham Basks in 'Cramer Effect' Random data point: Liam Nagle (ex-COO/pres, ex-Nortel) has left Bookham's board as of Jan. 31, according to an 8-K filing today.

Not a huge surprise. He stepped down as COO/president a year ago and got named to the board for a 1-year term:

So apparently he had a 1-year commitment to stick around, and it's just expired.

By the way ... I'd forgotten this, but Bookham still has a temp/"acting" CTO in place. Any word on their bringing in a permanent CTO to replace Michael Scott?
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