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Optical components

Bookham Slips Again

Another round of punishment hit Bookham Inc. (Nasdaq: BKHM; London: BHM) stock this morning as the company missed earnings estimates by a wide margin.

For its fourth quarter, which ended July 1, Bookham reported net losses of $27 million, 47 cents per share, on revenues of $55 million, compared with losses of $48 million, 90 cents per share, on revenues of $53.4 million the previous quarter.

For its fourth quarter a year ago, Bookham reported losses of $39 million, $1.16 per share, on revenues of $61 million.

Fourth-quarter non-GAAP losses of 37 cents per share were substantially worse than the analysts' estimate of 29 cents, as tallied by Thomson Financial . By midday, Bookham stock was trading down 34 cents (12.7 percent) at $2.33.

Most tech stocks are down since March, and optical stocks have been hit particularly hard after getting hyped early in the year; Bookham peaked at $10.36 during the spring, for example. But on a conference call with analysts this morning, Bookham officials stressed that they're still seeing the increased demand that was pumping up optical hopes. (See Bookham Basks in 'Cramer Effect' and Smiles Abound at OFC/NFOEC.)

"The optical components market continues to strengthen," Anania said on the call. "We see a lot of demand for new products -- particularly tunable lasers, but also new amps, pumps, and various actives and subsystems."

Bookham continues to walk a thin line when it comes to cash. The company's cash and equivalents totaled $43.3 million ending the fourth quarter, down from $66.9 million the previous quarter.

But the company still has some financial moves up its sleeve. This morning, Bookham announced a $25 million credit facility with Wells Fargo Foothill. (See Bookham Gets Credit.)

Bookham intends to get "back to operating cash-flow break-even over the next few quarters," CFO Steve Abely said on the call. Bookham has made some creative maneuvers during the past year to get there, including land sales and odd but cash-raising deals. (See Bookham Sells Land , Bookham Refinances, and Bookham Bags $11.9M.)

Bookham is continuing to balance its customer base, lowering its dependence on lead customer Nortel Networks Ltd. . Nortel accounted for 34 percent of sales in the fourth quarter, down from 45 percent the previous quarter. Huawei Technologies Co. Ltd. represented more than 10 percent of sales, and Cisco Systems Inc. (Nasdaq: CSCO) was "just short" of the 10 percent mark, Anania said.

For its first quarter, which ends in September, Bookham is predicting revenues of $55 million to $58 million, right on the money with analysts' consensus forecast of $56.6 million.

— Craig Matsumoto, Senior Editor, Light Reading

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Vent 12/5/2012 | 3:45:24 AM
re: Bookham Slips Again It would be interesting to see who has lost the most money in the component field
Bookham, JDSU,avanex, etc
certainly with the original float, new focus and the other deals Bookhammust be up there at around 900M$ lost

Vent
optiplayer 12/5/2012 | 3:45:24 AM
re: Bookham Slips Again "It would be interesting to see who has lost the most money in the component field
Bookham, JDSU,avanex, etc
certainly with the original float, new focus and the other deals Bookhammust be up there at around 900M$ lost"

It would depend on whether you want to measure cash losses or paper losses. If the later, JDSU is the hands down winner as they reported a loss of ove $56B (yes, billion) in 2001 on massive goodwill writedowns. In 2002 they followed up with a loss of almost $9B.

I suspect they would also win the cash loss battle as they have lost billions over the last 6 years.
^Eagle^ 12/5/2012 | 3:45:21 AM
re: Bookham Slips Again gossip on the street is that BKM is having difficulty getting the tunable laser through reliability qualification at their new plant / EPI in Shenzhen. (side note: got this news from Shenzhen insider... there are no secrets in china opto world).

anyone out there know different? Anyone seen them shipping volume of the tunables to anyone? Key is VOLUME. It is clear they are able to sample. Not clear is if they have any volume customers for it. Perhaps Nortel?

I hear they are doing well with some other products (DML's at 2.5G) and some pluggables.

but haven't heard anything concrete about the tunable or the InP MZI modulator they have.

Anyone have any insight into their sales in those products? or news on who they have design wins with for them?

sailboat
DZED 12/5/2012 | 3:45:17 AM
re: Bookham Slips Again "gossip on the street is that BKM is having difficulty getting the tunable laser through reliability qualification at their new plant / EPI in Shenzhen."

This problem was expected, see earlier discussions. Another reason the exec strategy of jumping into China and closing Paignton then not then being able to fill orders or qualify products was not a smart one.

Why would they close product lines when the customer wants them and they are profitable?
Another reason gross margin is falling I guess.

Setting up in China is not so simple. Farm girls may be cheap (and friendly) but don't seem to have the quality of a pick and place machine.

Top line may look good but bottom line is still terrible.
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