Avanex Misses Hard
In announcing earnings for its fourth quarter, which ended in June, Avanex noted its first-quarter revenues will be $44 million to $48 million. Analysts polled by Reuters Research were looking for $54.8 million.
The company also disappointed with its earnings for its fourth quarter, which ended June 30. Avanex reported non-GAAP net income of 11 cents per share, while analysts had expected 17 cents.
On a conference call with analysts today, Avanex officials cited three culprits. The market in Asia has slowed down, and Avanex is intentionally reducing sales of some of its lower-margin products.
Avanex also cited "pricing pressure." Earlier in the call, the company had noted it's been getting beaten down on price by one customer related to one older product; it's unclear whether Avanex was saying that specific circumstance contributed to the low forecast.
Avanex stock was down $2.39 (22.9%) at $8.05 in early after-hours trading.
Separately, Avanex said it's not having to delay revenues due to manufacturing limitations. JDSU (Nasdaq: JDSU; Toronto: JDU) had complained of that problem yesterday, saying $10 million in revenues would be delayed by a quarter as its manufacturing tried to keep up with demand. (See Doink! JDSU Hits Capacity Ceiling.)
On a conference call with analysts today, interim CEO Giovanni Barbarossa said Avanex doesn't have a similar problem because of its heavy use of contract manufacturers, which lets the company ramp up capacity quickly as necessary.
— Craig Matsumoto, West Coast Editor, Light Reading