Optical components

Sizing Up Emcore

9:40 AM -- The solar half of Emcore Corp. (Nasdaq: EMKR) is going to get the glory when the company splits in two. (See Emcore Preps Solar Separation.) That's the whole point, right?

"If we assume Emcore sells 19 percent of the solar business in an IPO priced at $15, then we calculate it would raise slightly more than $80 million, which could be used to fund further expansion of the solar line," analyst John Harmon of Needham & Co. wrote in a research note yesterday.

The optical side is worth noting, though, because Emcore joined the ranks of the big boys when it acquired the Intel tunables business. (See Emcore Beefs Up.) Its past four quarters of fiber-optic sales totaled just $119.1 million, but Harmon expects that to grow to $180 million in 2008 and $235 million in 2009.

From the apples-to-oranges department, then, we come up with this comparison: Table 1: Optical Sales
Company 2008 Revenues (est.)
JDSU 1,638.7
Finisar 474.5
Opnext 297.5
Bookham 248.5
Avanex 211.9
Optium 189.6
Emcore (optical) 180.0*
Source: Thomson First Call
* Source: Needham & Co. estimate

Emcore's optical half has a way to go, but it's not totally out of place.

As for what to call the optical half, Harmon suggests Ortel. It's still recognizable in optical circles, and a piece of Emcore can trace its genealogy there. (See Lucent Acquires Cable Component Vendor and Emcore Buys Agere's Opto Biz.) People might want to forget, though, that Ortel was acquired for $2.95 billion in (year 2000) stock and sold for $25 million.

— Craig Matsumoto, West Coast Editor, Light Reading

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