Analysts Await Avanex Numbers
The company quintupled in size to 1,117 employees on July 31, when it bought all of Alcatel's components business and most of Corning's (see Avanex to Buy Alcatel, Corning Units and Avanex Closes Acquisitions). It's assumed Avanex will become a components powerhouse alongside JDS Uniphase Corp. (Nasdaq: JDSU; Toronto: JDU) and Bookham Technology plc (Nasdaq: BKHM; London: BHM), but so far no one's gotten a clear picture of the New Avanex, "not even those guys themselves," says John Harmon, analyst with Needham & Co.. "They had all these businesses dropped in their laps."
Here's what we do know. Avanex officials have said to expect $25 million in revenues for the September quarter and a cash burn of $25 million per quarter for the next two years.
But several questions remain. For example: What will Avanex do with overlapping product lines? And what role will former Corning and Alcatel managers play in CEO Walter Alessandrini's inner circle?
"It's been hard to build a model for the new Avanex," says Todd Koffman, analyst with Raymond James & Associates. People are trying to figure out whether that $25 million in quarterly revenue could be conservative, or whether there could be some upside, he says.
Analysts are also curious if that $25 million quarterly burn rate might drop during the next few quarters, as Avanex outsources more of its manufacturing.
The company's conference call with analysts is scheduled for 4:30 PM, Eastern Time, on Monday.
— Craig Matsumoto, Senior Editor, Light Reading