I would be very surprised that Finisar doesn't break above $20 shortly after the UK referendum on June 23. This is based on the premise that the UK will remain in the EU. EU consists of 28 countries with a population of 545 million people and provides a huge market for telecom providers. While I do not how much telecom demand had been pent up due to the UK referendum, stability in this market is critical. While Oclaro and Lumentum revenues have performed better on a percentage basis than Finisar, I do not see Finisar's leadership position threatened. Finisar's revenues are still more than Oclaro and Lumentum telecom revenues combined. IMHO the only event that could shake up the industry would be a merger between Lumentum and Finisar. This, imho, would cause a domino effect. The remaining FO vendors will be forced to look for dance partners. The end result would be the overdue consolidation. Finisar datacom / manufacturing + Lumentum telecom / fabs that would be some kind of powerhouse. jmho.
Re:And a little later he then warned of drastic price cuts in datacom optics would have dire effects on FNSR which again was way overblown.
While I do not follow Kisner he was not alone on this one. Even Gerry Rawls came out and said that all the Web 2.0 players were interested in was price. Produce "just good" enough optics customized that will meet our specific needs was the request. . Not suitable for Finisar's vertical model and manufacturing scale. My understanding is that some of the smaller players who played along with the Web 2.0 requests have run into problems. Web 2.0 players have since had second thoughts and have turned back to "reliable" vendors such as Finisar and Luementum. Lumentum CEO mentioned that you could be on their preferred list one month, off the next and then back on again. Customers from hell!!
Re: The guy is still trying to convince his clients that he knows something that nobody else does. Undoubtedly, he's still embarrassed over his past calls and simply can't admit he was wrong.
Imho its more of a question of half full vs a half empty point of view. There were a few comments made in the CC regarding their telecom business that could be construed as long term performance issues, Having said that there were a lot of positives said in this CC, and previously echoed in the Lumentum CC, that bode well for Finisar. Namely scale and reliable manufacturing. I cannot over emphasize the word "reliable" ... :). Another positive that may have been overlooked by analysts is Finisar's financial strength. Even after spending money on increasing capacity I estimate they have in excess of $300 million in cash. A much different story compared to 2008 when Finisar had to sell their test & measurement unit to JDSU to raise money.
Disagree. Being product constrained is not "company" specific but generally experienced by the industry. The real culprits of this situation are the "customers from hell" who can't plan and expect immediate delivery at cheap prices.
apples and oranges, pas. From what I have read Ciena has some wins against Infinera. Lumentum is a major supplier for both Ciena and Infinera. For Lumentum its a commodity game of producing "reliable" components and modules to OEMs and large enterprises at the "cheapest" price.
Lumentum yes but Viavi is a different story. Best thing that ever happened was separating the fiber optics from the t&m business. Looking back now, the t&M unit was dragging down the rest of the company for so many years. 10 acquisitions on the t&M side and very little, if anything, to show for it. Expect a gut wrenching reorganization on the Viavi side and not a moment too soon. Missing a whole generation of SE product tools (3G) ... what a bunch of tools!! Hope they cut deep into the incompetent employees who got are us into this mess at Viavi.
ok but not great. I was hoping for "great" that would let us break through the $27 per share ceiling. I could see a further drop in LITE's share price. It really depends on how the market reacts to the "ok" results. Unfortunately a lot of what I didn't like was industry specific and outside Lumentum's control. First and foremost there are still too many competitors. We still need more consolidation which I don't see forthcoming. The only way out for Lumentum is to continue raising the bar to entry and stripping out costs at the fab level. Where Lumentum did well was in Roadams/submarine where there are essentially only one or two competitors. As mentioned in the CC its easier to invest in manufacturing capacity when you know you will get the lion's share of business. Difficult to invest with confidence when there are six competitors cutting each others throat. On a positive note all large data centers/(Web 2.0) are buying directly from the FO vendors and not the OEMs. Although 3d sensing is a small part of Lumentum's business. My dream, and I'm not using the word loosely, is that Lumentum becomes an Apple supplier. This quarter Lumentum wrote down $7,2 million worth of 3D sensing inventory. Hopefully this is not an ominous sign. Sent an email to investor relations for further clarification.
Pas, keeping things in perspective JDSU only got into T&M business in 2005. Disappointing as it sounds you can't go back 7 or 10 years and fix the problems, In the SE business unit where the problems exists 38% of revenues comes from legacy and 62% from growth. A flip from a year ago (62% legacy, 38% growth) . As dismal as the figures are, and I mean dismal, this situation is fixable. I agree with your disappointment and the new CEO who said you can't put lipstick on this pig!
The conference call was flat. Nothing said in the CC to make you want to buy the stock but on the positive side nothing out there to make you want to sell. I could see a small drop tomorrow based on the forecast. The new CEO appeared to have a good grasp of the situation with a plan going forward. CEO was was more than able to adequately answer the analyst questions which, imho, were more forward looking than the ones asked in the past. The only real positive in the CC for me is that mgmt still believes that while their T&M portfolio is not perfect its good enough to do end-end testing. Instead of spending time and money on acquisitions, the focus will be on consolidating and realigning the r&d/marketing/administrative centers scattered around the world resulting from previous acquisitions. From the CC it appears that previous JDSU mgmt teams had missed critical technology waves and had to play catch up. It appears that, according to present mgmt, Viavi is reasonably caught up and can now focus on pushing their existing portfolio. Whether this is true time will tell.
aaah ,,,, the days of the beauty awards. Let's hope its the days of our products are doing well and we don't want to tip off the competitors or, better still, just plain cutting back of expenses with regard to paying the organizations that give out the awards. Regarding LITE I am reasonably confident about the upcoming Conference Call based on the results of the Fabrinet (FN). As for VIAVI i simply don't know. Will Viavi's initiatives bear fruit this quarter, I don't know. Can the new Viavi mgmt deliver and push forward their products, I don't know. After all the T&M acquisitions made under the former JDSU mgmt I am still not convinced they have the portfolio going forward. Currently mgmt say they are satisfied with the current portfolio indicating its matter of execution. I will be looking for signs on how well their channel program is doing.