ONI Beats Numbers, Boosts Guidance
ONI executives painted the picture of a booming business, a radical departure from some of the recent news from other corners of the market. Earnings announcements from many other companies in the sector are reflecting negative growth and mounting losses (see Cisco's Inventory Woes Mount and Sycamore Drops a Bomb).
ONI reported revenues of $45.1 million in the first quarter, an increase of 50 percent over the prior quarter. Those numbers also beat the revenue forecast given in the company's fourth-quarter conference call, which was $35 million to $40 million.
The company reported a pro forma net loss of $9.3 million or seven cents per diluted share, excluding non-cash charges. The reported net loss in the first quarter, including special charges, was $31.1 million or 24 cents per diluted share versus a reported net loss of $34.2 million or $1.41 per diluted share in the first quarter of 2000. The company's cash, cash equivalents, and long-term investments balance on March 31, 2001, was $799.1 million.
"We have not seen a slowdown in capital spending in optical equipment in our market," said Hugh Martin, ONI Systems' CEO. "We are focused on the fastest growing and most vital area of the telecom industry."
Martin attributed some of the company's success in gaining new carrier business to the ability of ONI's products to offer protected optical services, in-service upgrades, and a 10-Gbit/s interface for its DWDM systems. ONI's architecture, which deploys DWDM metro switches in rings, allows carriers to sell either an unprotected or protected gigabit optical circuit.
Company executives were confident enough to bump up estimates again, raising their guidance for the second quarter to a range of $50-$60 million, up from a prior estimate of $45-$55 million. Third-quarter revenue is expected to be between $60 million and $70 million. The company now expects $245 million to $255 million in revenue for 2001 -- up from the prior estimate of $225 million to $235 million -- expecting to break even by the end of the year.
According to Martin, the company had 21 customers and 670 employees by the end of the quarter. "We expect to have at least 28 to 30 customers by the end of 2001... For the remainder of the year, the IXC area will be the largest category."
-- R. Scott Raynovich, Executive Editor, Light Reading http://www.lightreading.com