"There's a climate of worry in the wake of the Cisco, Lucent, and Nortel earnings," said one investment banker, who asked for anonymity. "Components are taking a beating all round. It's an overreaction, but that's the way it is." (See Cisco: Boom or Bust? .)
Bookham's results did nothing to assuage this feeling, even if it is extreme. On the one hand, the news was glowing: The company reported 83 percent quarterly growth in overall revenues, which totaled 7.7 million pounds sterling, or US$11.3 million. Revenues were up 1,027 percent, Bookham said, from the same time last year.
"We're very pleased with our results," said chairman and CEO Andrew Rickman on a conference call with analysts this morning. Bookham, he says, is well on track to become a key provider of integrated optical components -- ones that put multiple DWDM functions onto a single chip. To speed this goal, the company's ramped up manufacturing capacity from 20,000 to 120,000 square feet since January 2000 and increased headcount 33 percent to over 800 employees. A somewhat lackluster follow-on share offering this summer (see Bookham Readies New Round) contributed about $143 million to this growth.
But Bookham had bad news too: It reported net loss of 6.3 million pounds ($9.2 million) compared to 4.6 million pounds ($6.7 million) the quarter before. That tallies to $0.05 net loss per ordinary share.
Investors are concerned about these good-and-bad results, which seem to be hindering the company's ability to encourage heavy investing. On this morning's conference call, their concerns focused on several areas:
Bottom line? Bookham is getting mixed reviews. As one report from Salomon Smith Barney notes: "... the risks of execution outweigh the potential rewards going forward for Bookham. Their technology has no track record; they have not yet started high volume manufacture; the average selling price of their products is declining; and they have only a few large customers."
But contrast that comment with another take from Wit Soundview (Nasdaq: WITC): "... Bookham is among a short list of companies doing truly innovative things in the optical component segment that by their nature are risky, but in the end create the potential for it to become one of the most outstanding stories in the sector over the next 5 years."
Bookham's shares were trading at $30.31 midday, about 1.62 percent lower than yesterday.
-- Mary Jander, senior editor, Light Reading http://www.lightreading.com