It seems the market may be understanding the significance of ALU'a "strong Optical" and "strong China" results. Some of this may also rub off on OCLR, as it confirms that Huawei will have a phenomenal 2014, and I believe Huawei is an OCLR 10% customer. However, it's obvious to me that NPTN is much better positioned to take advantage of these trends.
Not growing nearly fast enough to compensate for the shrinking legacy products, and meanwhile the clock is ticking as losses mount...
"On the transmission side, we are seeing many design wins for our 100G coherent Micro-iTLA and lithium niobate modulator product. We are struggling to keep up with the demand and to ramp both of these products rapidly enough. As a result, we are not increasing our revenue as quickly as we had hoped. I do expect the revenue for these two products to grow by over $3 million this quarter compared to last. We anticipate that these two product lines will continue to grow over this calendar year and beyond.
Also, at OFC, we not only announced but demonstrated the industry's first CPF2 module, the 100G coherent transmission. We will be shipping our first prototype module this month. We have many very strong customer engagements for the CFP2.
By leveraging our indium phosphide, laser integration and advanced packaging capabilities, our customers can now use pluggable coherent modules for metro and long-haul application. The modules compact form factor that delivers new levels of performance and flexibility for optical network operating in a 100G and beyond. Major carriers are planning to use the 100G coherent in the metro network, providing us with significant long-term additional growth opportunities. This further emphasizes that our R&D investment and priorities have positioned Oclaro to be a leader in this large fast growing market."
I was trying to figure out with optical components company had a better chance to recover to its 2014 highs.
Both OCLR and NPTN have taken a beating recently.
The ALU Q1 results announced today persuaded me that NPTN had much better chances of
recovery. ALU is NPTN's 2nd best customer (17% of sales), behind only Huawei (23% of sales).
ALU's results showed amazing growth in Asia Pacific, due primarily to China network spending.
One of the highlights was ALU's growth in its IP Transport (optical products) division.
Given that China's network spending in 2014 will, by far, outpace telecom spending in other regions of the world, and that China makes up 42% of NPTN's revenues, I think NPTN is very well positioned in 2014.
NPTN already indicated to expect a strong 2nd and 3rd quarters due primarily to strong China sales.
Also, in comparing gross margins, I noticed that NPTN's margins are MORE THAN TWICE that of OCLR's.
It seems the main reason NPTN has been attacked lately is because of it being late in filing its 10K for 2013. However, based on comments from their last call, this should occur within the next couple of weeks.
So, all in all, it seems NPTN stands a much better chance of recovering its lost ground than OCLR.
However, I welcome comments from OCLR supporters.
Though some here think that because a few people have sold their stock the company should be sold too..lol...and if was sold we'd be seeing some serious valuations for those business sections...we've been surprised already..
Sentiment: Strong Buy
So where was the bounce back into the 2's Oh wise one?
On your knees grovelling in the rubble looking for the end of the rainbow is it?
re: Taking them out just to get rid of the competition has always been one reason to buy.
Because of the the expense and distraction to the acquirer, consolidation favors the competition far more in this case. They get the same benefit of industry consolidation without the costs and hassles. So it is the tech and specifically the brand new CFP2 InP modulators (0% of revs at this point) thats attractive. Valuable asset but is it worth the baggage that Oclaro's 46% 10G (legacy stuff) and another 8% industry applications. Even the 100G newer product which comprises 43% of their revenues is mainly redundancy.
All of which takes careful study to weight benefit vs cost. If Oclaro emerges at the dominant supplier in 100G or coherent, then their value increases substantially....that's really a big 'if' at this point.
Taking them out just to get rid of the competition has always been one reason to buy. Now, if they have tech that adds to the buyer's bottom line, that is just icing on the cake.
OCLR has tech.
is moving ahead $3.50 may be a q or two ahead of itself but $5 -$7 is within reach in the medium term of 9 to 15 months
I believe after the restructuring is completed, OCLR will be attractive whether in parts or whole. Has to be valued much more than today. This was cut in half in less than three weeks.
Its as much a matter of cost synergies and post merger integration costs...including facility closures/relocation, layoffs, redundancy elimination, etc. If its simply too costly, then suitors would be interested only in a fire sale where they can pick ony the assets of value to them.
An "inevitable buyout" is as probable as an inevitable ch11. Assuming there is a buyout, its timing will determine if the shareholders get any premium to the current price. If the turnaround is prolonged, cash is diminished, and still no breakeven, Oclaro will not fetch much in a takeover scenario.
I agree, for this market cap, it is a real possibility someone will take them out.
Practically getting the biz for next to nothing.
They will never break even. I've been watching for the past 10+ yrs. High salary overhead, not enough demand as it's not a consumer product, being in High-Tech and they are mostly in silicon valley which add to the investor pain.
I think they'll do well if FNSR or JDSU absorbs them....
Agree with your concerns. Clearly, the market is concerned too, as this is a 1 dollar stock at the moment. Pretty speculative in nature, based on the overall market view.
I think they have a sporting chance now with the new leadership. If this was the same old tired leadership from 2 years ago, I'd never have bought any shares. I think the new team and their focus on 100g is the right time and right product. IMHO.