INDUSTRY STOCKS
The datacom side of Finisar’s business now accounts for more than two-thirds of the company’s revenue.
$115 million and announced on 11 September, 2013, provided Oclaro with $88 million in cash and led to a jump in its share price from just over $1.00 to $1.60.
Restructuring and resizing takes time and effort, but Dougherty says that this is not preventing Oclaro from investing strongly in its research and development. According to him, Oclaro is focusing on photonic integration, laser innovation and advanced packaging, because this will enable the introduction of components for telecom and datacom applications that consume less power while operating at higher speeds. “We have targeted development activity in the high growth areas of components and modules for 100G coherent application, indium phosphide integrated circuits, 100G client interfaces, 40G and 100G modules for datacentres as well as tuneable SFP+.”
Finisar’s sales flourish Oclaro’s rival Finisar, which is in third place on the Compound Semiconductor Share Price Leaderboard, has seen its share price climb from around $13 in the first half of 2013 to north of $20 throughout 2014, with a peak of just over $28. This Sunnyvale-headquartered company, which claims to be the world’s largest supplier of optical communication components and subsystems, is in a period of impressive financial performance that includes six successive quarters of revenue growth.
Recent progress is highlighted by looking at the earnings for the third fiscal quarter that ended on 26 January, 2014, and comparing this with the equivalent period for the previous year.
Assessing the company in that manner shows that sales have climbed from $238 million to an all-time record high of $294 million, while gross margin has increased 28.5 percent to 35.9 percent.
Finisar breaks down its quarterly sales figures into those for datacom and telecom applications. The datacom side has seen substantial growth over the last year (see table 1), and topped $210 million in the most recent quarter. This was 3 percent higher than the previous quarter, thanks to increased sales of 40-gigabit Ethernet transceivers.
Now the company is currently positioning itself for further growth, via a combination of acquisitions and the construction of new facilities.
Chief Financial Officer Kurt Adzema told investors on 6 March, 2014, that in the fourth fiscal quarter the company would spend about $33 million on capital equipment, with the majority of this invested in constructing the shell of the second building of the new Wuxi, China production site. “We expect the shell of the building to be completed by fall of 2015 and now plan to immediately start to fit out several floors of the building and then fit out additional floors over time as needed.”
Increased capacity has also resulted from the acquisition of u2
t this January. “Finisar added u2 t’s InP-based high-speed
receivers and photodetectors, including their industry-leading 100G and 200G coherent receivers that are used by multiple system manufacturers today,” said Eitan Gertal in the 6 March call. The acquisition is claimed to consolidate Finisar’s previously announced partnership with u2
t on InP-based
Mach-Zehnder modulators for 100G and 200G coherent applications.
Gertal believes that these receivers, photodiodes and modulator technologies can combine with Finisar’s tuneable lasers to provide a full suite of vertically integrated optical components, which can be used to construct very high-performance modules for the 100G and 200G coherent metro and long-haul markets.
Although Oclaro’s share price has more than doubled this year, it is not high by historical standards.
32
www.compoundsemiconductor.net June 2014
To increase sales, Finisar is also continuing to develop several new products with high levels of efficiency. In the datacom sector, the company boasts that it now has modules that consume less power than those of all of its competitors, and on the optical side, it is shipping beta samples of its tuneable SFP+ modules that consume just 1.5 W, thanks to
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