Was hoping to get more information on the progress of the next generation Vinci ONT, which, of course, has implications for MRV.
No new news. Just a reiteration that TLAB's ultimately expects a savings of $30 million in 2005 resulting from the lower cost/higher margin ONT.
TLAB's is about 40% completed with its $300 million stock buyback, which began about two months ago, if I recall. Definitely a sign of confidence, and at the very least, should provide a floor for TLAB's stock price going forward. Seems like TLAB's has more control of its destiny than MRVC. But due to the significant size differences of the two companies, MRVC has greater growth potential than TLAB in the FTTX space.
<Hopefully , MRV can provide forward guidance>
Brad....Noam has never ( to my recollection ) seen fit to provide forward positive guidance. With reference to this quarter, one suspects that Noam will provide a warning so that share holders are not blind-sided again. I would think that in just a few more weeks he will have some definite idea about how bad ( or not so bad ) this quarter has been, and we will possibly note the hanging of crepe in the third or fourth week of June.
Don't forget to add Investor that it is the fault of management at MRV that the company continues to be thought of as "Luminent" with very little attention being paid to the rest of the company. One must wonder how long it will be until some larger shareholders ( are there any left? ) begin to agitate for better IR/Pr and start to "hold Noam's feet to the fire". He has been amazingly unresponsive in the past.
"To use a phrase, is there anything wrong with this picture?..."
This is a very fickle market, Investor.
Current valuation reflects the market's scorn and we know the current Q is going to suck.Hopefully , MRV can provide forward guidance though which will show business getting back on track. It won't take much good news to lift this stock but we need something to be hopeful about.
Until last Q's guidance , things were going well for MRV with 8 consecutive quarters of improving results. No reason to think they can't start a new streak.
As I recall Noam has said several times in the past that Luminent supplies the components to the system products. Thereby, increasing margins for the rest of the company. So, the true value of Luminent may not be so obvious as just the bottom line numbers.
Good post. I would say that the about 8% triplexer portion of Luminent's 15% portion of MRV's last quarterly revenue impacted the 4.6% miss($3 million below low end estimate), but contributed to about 90 percent of the about 40% price share drop due to investor disappointment.
Preaching to the choir when I address you, but I wonder if the rest out there see the pattern. To use a phrase, is there anything wrong with this picture?...
Brad....an analyst friend of mine says that if MRV sold Luminent that MRV would be profitable....confirms your thoughts...Luminent must have some very meaningful possibilites for Noam to absorb the same punishment over the next few quarters. No way to predict the speed of the take rate and build out.
Just because VZ said they were going to pass 2 Million homes in '05 doesn't mean it had to be done in equal increments ( 1/2 million) per quarter.
That they are laying down the fiber also doesn't mean that it is going to be lit instantly because they have to hire and train people for the installations.
All along the supply chain, the buildout is going to be lumpy because of timing considerations.
You can speculate your reasons but you have to answer this. Why would MRV be ramping triplexer production for the Vinci platform if they had lost the business?
There are also interoperability issues because the old triplexer couldn't do the job. Follow the logic. For the same reason,nobody else is going to be able to step in with a generic universal platform Triplexer.
I think Scotch pointed out that Luminent was 15% of MRV's revenues and Triplexers was about half of that ( something like 8%) so the uncertainty in this business is certainly being over-emphasized to MRV as a whole.
Let me give you 2 more numbers from Brad's stat sheet from last Q's results :
Luminent contributed only 4.76 % of MRV's total gross profii.
Luminent contributed nearly 72% of MRV's Operating Loss for the Q.
PPU, point taken. That's a much more plausible explanation on the downside than you would get from most of the shorts on this board. BTW, I suspect that the smart money shorts have already declared victory and moved on from MRV to other greener pastures themselves! All is left are amateurs who will ultimately get burned. Shorting MRV under $2 is not much different than being long it when it was trading like many other NAZ stocks at or near $100 at the top in 2000-01. Pure greed.
Having said all that, I think TLAB has already milked the "cost savings" cow for reducing the cost of the ONT by buy Vinci (and their market leading 2nd generation ONT). By that move alone, TLAB's reduced their cost for ONT's substantially from $100 to $80. And if you read posts from Sally and Scotch, who seem to have a pretty good handle of what's out their in the marketplace in this industry, you might be swayed to the view that MRV still has the best transeiver out there today. That's not to say that competitors aren't out there (they are), but at least right now MRV has the leading position and the TLAB's/Vinci move did nothing to change this.
And if VZ/SBC/BLS are successful in their lobbying efforts with the FCC to get favorable regs. to preempt municipal review on video franchises, I strongly believe FTTX spending growth by the major telecom carriers will just explode. If you read my earlier posts today, this very much remains a possibility with a FTTX friendly Republican administration controlling the FCC (whose Commissioner publicly stated sympathy for VZ's argument).