Optical components

OMG! Bookham Is Profitable!

At long last, Bookham Inc. (Nasdaq: BKHM; London: BHM) has had a profitable quarter.

Yes, it's a big deal, because it's the first profitable quarter ever for the long-suffering optical components company, Needham & Co. analyst John Harmon points out.

The fun might not last long, though. Bookham's forecast range for the December quarter says the company will still be teetering on the edge of breakeven, with earnings before interest, taxes, depreciation, and amortization (EBITDA) between negative $2 million and positive $2 million. (See Bookham Reports Q1.)

For the moment, though, Bookham has reason to celebrate, or at least to take a long ice cream break. For its first quarter, which ended Sept. 27, Bookham reported revenues of $66.5 million and net income of $2.2 million, or 2 cents per share, compared with the previous quarter's revenues of $62.6 million and net losses of $1.9 million, or 2 cents per share.

The numbers, and the EBIDTA prediction, match the forecast Bookham gave a couple of weeks ago. (See Bookham Narrows Forecast.)

Even if you don't count $6.5 million in intracompany currency adjustments, Bookham's quarter was in the black.

Bookham went public in 2000 and has piled up the losses ever since.

Table 1: Bookham's Losses
Fiscal year Net income (losses)
1999* $(26,014)
2000* $(42,268)
2001* $(164,370)
2002* $(164,938)
2003* $(125,747)
2004 $(125,078)
2005 $(247,972)
2006 $(87,497)
2007 $(82,175)
2008 $(23,440)
Source: SEC documents
* Fiscal year ended in December. Bookham's fiscal year now ends in June.

Growth areas for the first quarter, in order, were tunable products, amplifiers, and 980nm pump lasers, CEO Alain Couder said on last night's earnings call with analysts.

Margins on tunable lasers have finally risen to the industry average, he added. "The tunables are not a drag any more on the profitability of the telecom business."

The bad news is that three of Bookham's large North American customers have an oversupply of inventory, meaning they'll be buying less in the near future. That probably includes Nortel Networks Ltd. , which represented 18 percent of sales last quarter. (See Nortel Plunges on New Forecast.)

Gross margins will be down as well -- 21 to 26 percent, versus 26 percent in the first quarter, Bookham says. Analysts polled by Reuters Research are expecting non-GAAP losses of 1 cent per share for Bookham's second quarter.

Bookham's share price is around $0.62 a share, giving it a market capitalization of $62.85 million, even less than one quarter's worth of revenues. The company's stock has lost more than 80 percent of its value in the past 12 months.

— Craig Matsumoto, West Coast Editor, Light Reading

HomerJ 12/5/2012 | 3:28:48 PM
re: OMG! Bookham Is Profitable! wow, profitable just in time for the great optical depression of 2009. their biggest growth is in tunables, an area that has some risk given they are getting sued. but that could take years to settle and they continue to ship stuff in the meantime.
deer_in_the_light 12/5/2012 | 3:28:37 PM
re: OMG! Bookham Is Profitable! depression should be mild for optical, bandwidth is scarce and technologies such as the ones developed by Bookham are needed. it will indeed be interesting to see if market share shifts away from incumbents like Jdsu to the emerging leaders finisar, opnext and bookham.
DZED 12/5/2012 | 3:28:13 PM
re: OMG! Bookham Is Profitable! Wow, at this rate it'll only take 40 years to earn back the money they burned.
THEN they can claim to be profitable.

Would have been $2.6m profit if the execs hadn't pocketed $400,000 in bonuses, while the share price has halved yet again.

Nothing changes I guess.
deauxfaux 12/5/2012 | 3:28:12 PM
re: OMG! Bookham Is Profitable! The reality is that if BKHM didn't have a one time postive NON CASH, INTER COMPANY benefit of $6.5M from currency exchange, they would have turned in another negative quarter.

They still burned cash, they still lost money from operations and their execs are patting themselves on the back

Much ado about nothing, as they will need cash within another year and the markets will not be so forthcoming
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