Opnext Bounces Back
After starting the day only slightly up, the optical components vendor's shares have risen 72 cents (16.3%) to $5.14 as of early afternoon trading.
Opnext sank on Jan. 11 after reporting a cavalcade of problems affecting revenues for its third quarter, which ended in December. Among them were inventory problems at one 10-Gbit/s transceiver customer; shortages from one supplier and quality concerns with an unnamed 40-Gbit/s chip supplier; and a general shortfall in sales of 300-pin, fixed wavelength transcievers. (See Opnext Lowers Q3 Outlook.)
That's going to bring revenues down to $66.4 million, as opposed to the $77 million to $80 million Opnext had predicted. Opnext shares fell to $4.42 on Friday from the previous day's close of $6.96.
Opnext hasn't set a date for reporting third-quarter earnings.
Technology stocks are up in general today, thanks in part to upbeat earnings from IBM Corp. (NYSE: IBM). Few are up 16 percent, though; Opnext appears to be benefiting from analysts coming to its defense.
While downgrading Opnext to Buy from Strong Buy in a research note this morning, Needham & Co. analyst John Harmon writes that Opnext is "well positioned to grow with the rapidly growing 10-Gbit/s optical module market due to its advanced technology, combined with its strategy to secure design wins early on."
— Craig Matsumoto, West Coast Editor, Light Reading