Components Execs Eye Profits
All four are excited about the prospect of breaking even sometime next year, however. They even have a role model in PMC-Sierra Inc. (Nasdaq: PMCS), which surprised analysts with a slight profit reported last week (see PMC-Sierra Profits in Q3).
"Profitability is within sight," said AMCC CEO Dave Rickey.
The mood on yesterday's earnings calls was sunny, with companies reporting sporadic increases in activity -- enough to be happy about, but too spotty to signal recovery.
The near future remains murky because, even as communications business grows, prices continue to drop, JDSU CEO Kevin Kennedy told analysts. Completing his first quarter at the helm of JDSU, Kennedy said the company is "still in innings 1 and 2" of its "mobilization."
The days of massive layoffs do appear to be over, with the company sitting at 5,200 employees. "I do not think headcount is the significant lever to get us to that level of breakeven," Kennedy said.
For its September quarter, the company reported losses of $28.1 million, or 2 cents per share, on revenues of $147 million. JDSU's breakeven point will be around $200 million for the December quarter and $170 million for the June quarter, officials said.
One bit of news was that JDSU racked up 14 circuit-pack design wins among major customers recently. Revenues from those wins, "measured in the millions of dollars," won't appear until after the next two quarters, CFO Ronald Foster said.
Separately, chief operating officer Syrus Madavi left the company Oct. 17, as previously announced. Former CEO Jozef Straus continues "as a close advisor to me," Kennedy said (see JDSU Launches Regime Change).
Meanwhile, TriQuint officials were upbeat about the optoelectronics business acquired from Agere Systems Inc. (NYSE: AGR.A) (see TriQuint Closes Agere Acquisition). The division, while still losing money, reaped $9.3 million in revenues during the September quarter, a 7.6 percent climb from the previous quarter's $8.7 million.
CEO Ralph Quinsey admitted the revenues aren't what TriQuint expected when announcing the purchase late last year. The Breinigsville, Pa.-based division "missed a whole design cycle" just before the acquisition because the team "thought they were going out of business," based on comments made by Agere executives.
But he remains convinced that the optoelectonics division will keep growing, especially as manufacturing gets sucked down to Matamoros, Mexico. TriQuint officials think the optoelectronics division could break even at revenues of $15 million per quarter, and Quinsey said he's aiming to hit that mark in 2004.
"Every quarter, top line and bottom line [growth]. I feel good about that business," Quinsey said.
Overall, TriQuint reported losses of $5.8 million, or 4 cents per share, on revenues of $78.8 million.
AMCC expects to see profitability by next June, CEO Dave Rickey said yesterday. The company reported losses of $22.9 million, or 8 cents per share, but revenues were up 22 percent from the previous quarter, at $25.2 million.
Rickey made it clear that AMCC is invading the storage networking market. The first move was the acquisition of JNI, expected to close this month (see AMCC Moves Into Storage). And, in kind of a warning shot, AMCC has shifted funds to "shorter-term, lower-return" investments, freeing up cash for more acquisitions, CFO Stephen Smith said yesterday.
Rickey also declared storage area networking (SAN) to be a new division within AMCC, headed by senior vice president Brent Little, although it appears the division will be empty until JNI comes on board.
Vitesse, meanwhile, seems done with its restructuring. The company should break even by March, according to analyst Jeremy Bunting of Thomas Weisel Partners.
That's one quarter later than Bunting previously predicted, due to Vitesse selling its optical modules business (see Avanex Adds to Arsenal). But he wrote in a report this morning that Vitesse overall "has done an outstanding job" of remodeling itself and that the makeover is complete.
The key for Vitesse is that its revenues are coming from new areas such as storage or Ethernet over Sonet. "We're seeing almost all of our growth come from new products in new boxes, and very little of it coming from legacy products," CEO Louis Tomasetta said. Vitesse reported losses of $36 million on revenues of $42.8 million, $22.6 million of which came from the storage sector.
For detailed earnings statements, see: Light Reading