Veeco Looks to Automate Optical
The company's thinking is this: Precision measurement and automation tools have been a major force in the development of the storage and semiconductor spaces. Automated manufacturing and measurement is just getting started in optical, so Veeco is focusing on the sector.
Its most recent numbers seem to validate the company's strategy. The company this morning posted net income of $12.9 million, or 51 cents per share, compared to a loss of $12.4 million, or 50 cents per share, in the first quarter of 2000. Revenues of $127.3 million represent 9 percent growth from the previous quarter and 47 percent from the year-ago period.
In the company's distinct business lines, the optical unit now accounts for 39 percent of the business, with the semiconductor area representing 33 percent and data storage 28 percent.
CEO Ed Braun, in an interview with Light Reading, cited a number of technological advances that make the optical industry ripe for automated tools. Higher channel-count DWDM (dense wavelength-division multiplexing) systems, 100 GHz thin-film filters, and new gain-flattening filters are very difficult to manufacture at high volumes. Veeco’s new ion beam deposition equipment and physical vapor deposition tools enable companies to automate inspection and sorting functions related to the manufacture of DWDM components. Braun thinks this will make for more efficient production ramps and lower manufacturing costs, speeding the deployment of optical products into metro and access networks.
“We already see lots of R&D spending going into 100-Gbit/s applications,” says Braun. "Our optical sales have grown from 7 percent of revenues in 1999 to 36 percent of first-quarter 2001 revenues. By 2004, as we approach a billion dollar revenue run rate, optical should account for 40 to 50 percent of total sales.”
Despite the long-term bullish tone, the company apparently has questions about near-term growth. For example, first quarter bookings at the company were $113 million, a 2 percent increase from the prior year, but down 39 percent from the fourth quarter, due to continued near-term uncertainty in optical and semiconductor markets.
Veeco also revised its financial guidance, dropping revenue expectations for 2001 to between $485 million and $505 million, below previous guidance of $550 million. But these numbers still represent a 25 percent increase over the $387 million reported in 2000. Veeco’s 2001 EPS forecast is now $1.80 to $1.95 versus prior guidance of $2.31 to $2.39. In 2002, the company projects 25 percent sales growth, which would result in $610 million to $635 million in revenues and earnings per share of $2.50 to $3.00.
-- Christopher P. Bulkey, special to Light Reading http://www.lightreading.com