7 May 2012

NeoPhotonics’ revenue grows 8% year-on-year in Q1

For first-quarter 2012, NeoPhotonics Corp of San Jose, CA, a vertically integrated designer and manufacturer of both indium phosphide (InP) and silica-on-silicon photonic integrated circuit (PIC)-based modules and subsystems, has reported record Q1 revenue of $54.2m, down 5% on $57.2m last quarter but up 8% on $50m a year ago (and above the expected $46-51m).

Results exceeded projected ranges for revenue, gross margin and earnings per share. “We experienced continued strong demand in our speed and agility product categories, particularly for coherent 40G and 100G products, as deployments of faster networks continue to proliferate globally,” says chairman, president & CEO Tim Jenks. Overall, 40/100G products exceed 10% of total company revenue for the second consecutive quarter.

“We are also pleased with the demand for products we acquired from Santur Corp [in October 2011], particularly InP-based PIC products such as tunable lasers,” says Jenks. “Revenue and gross profit from those products continued to grow from the prior quarter as new customer engagements since the acquisition have started to generate revenue and existing customer engagements have continued to expand,” he adds.

During the quarter, NeoPhotonics announced the completion of phase 1 in its plan to significantly increase production capacity of narrow-linewidth tunable lasers (NLW-TL) in support of rapidly growing demand. The firm has doubled NLW-TL output since initiating the production plan in fourth-quarter 2011. Demand for these products has outstripped industry capacity due to the rapid uptake of coherent optical technology coupled, with industry supply constraints attributable to the flooding in Thailand in October 2011.

On a non-GAAP basis, gross margin has fallen further, from 25.8% a year ago and 23.5% last quarter to 23.9% (though above the expected 20-22%). Loss from continuing operations was $5.4m ($0.22 per diluted share), an improvement on $6.4m ($0.26 per diluted share) last quarter, although still down on break-even a year ago. During the quarter, total cash, cash equivalents and short-term investments fell from $86.4m to $83.8m, due mainly to cash used in operations, partially offset by strong collections, and scheduled debt payments.

During the quarter (in early March), NeoPhotonics announced sample availability of its PIC-based Multicast Switch for next-generation ROADM (reconfigurable optical add/drop multiplexer) applications. The Multicast Switch is intended to build on current WSS (wavelength selective switch) and ROADM technology to enable next-generation ‘colorless, directionless and contentionless’ (CDC) networks.

As of the end of first-quarter 2012, NeoPhotonics had substantially completed the integration of Santur. Since the acquisition, NeoPhotonics has combined the respective organizations, consolidated certain operations, merged ERP (enterprise resource planning) systems, eliminated redundancies, and trained and engaged the respective firms’ sales channels to support the expanded product offerings.

For second-quarter 2012, NeoPhotonics expects revenue to rise to $55-61m and gross margin to be 23-25%. It also expects diluted loss per share from continuing operations to be cut to $0.14-0.22.

Also, after the end of Q1/2012 (at the end of April), NeoPhotonics announced that it has received an investment of $39.8m in gross proceeds from RUSNANO, a $10bn sovereign investment corporation based in Moscow, Russia. RUSNANO acquired 4.97 million newly issued common shares in a private placement at a price per share of $8. NeoPhotonics intends to use the net proceeds to establish design and production capabilities in Russia for the benefit of its global organization and for general corporate purposes.

See related items:

NeoPhotonics reports record revenue of $57.2m in Q4

NeoPhotonics grows margin in Q3 despite 16% revenue drop to $44m

NeoPhotonics’ revenue grows 14% year-on-year to record $52.1m

Tags: NeoPhotonics PICs

Visit: www.neophotonics.com