Edit Symbol List
Enter up to 25 symbols separated by commas or spaces in the text box below. These symbols will be available during your session for use on applicable pages.
Don't know the stock symbol? Use the
Symbol Lookup tool.
Alphabetize the sort order of my symbols
Investing just got easier…
Sign up now to become a NASDAQ.com member and begin receiving instant notifications when key events occur that affect the stocks you follow.Access Now
Oclaro, Inc. (OCLR)
F3Q 2011 Earnings Call
April 28, 2011 4:30 PM ET
Jim Fanucchi – Summit IR Group
Jerry Turin – CFO and Principal Accounting Officer
Alain Couder – President and CEO
Ajit Pai – Stifel Nicolaus
Alex Henderson – Miller Tabak
Kevin Dennean – Citigroup
Subu Subrahmanyan – Sanders Morris
Hamed Khorsand – BWS Financial
Mark Su – RBC Capital Market
Previous Statements by OCLR
» Oclaro CEO Discusses F2Q11 Results - Earnings Call
» Oclaro CEO Discusses F1Q2011 Results - Earnings Call Transcript
» Oclaro, Inc. F4Q10 (Qtr End 07/03/10) Earnings Call Transcript
» Oclaro, Inc. F3Q10 (Qtr End 04/03/10) Earnings Call Transcript
At this time, I would like to turn the call over to Jim Fanucchi of the Summit IR Group. Please go ahead, sir.
Thank you, operator and thanks to all of you for joining us. Our speakers today are Alain Couder, President and CEO; and Jerry Turin, Chief Financial Officer of Oclaro.
Statements of management’s future expectations, plans or prospects for Oclaro and its business including statements about future financial targets and financial guidance and Oclaro’s plans for future operations and any assumptions underlying these statements are forward-looking statements under the Private Securities Litigation Reform Act of 1995.
There are a number of important factors that could cause actual results or events to differ materially from those indicated by such forward-looking statements, including the risk factors described in Oclaro’s most recent Annual Report on Form 10-K, most recent quarterly reports on Form 10-Q and other documents we periodically file with the SEC. The forward-looking statements discussed today represent Oclaro’s views as of the date of this conference call, and subsequent events and developments may cause Oclaro’s views to change. Oclaro does not intend and is not required to update any forward-looking statements as a result of future developments.
In addition, we will be discussing non-GAAP financial measures. These non-GAAP financial measures are not prepared in accordance with GAAP and should not be considered as a substitute for or superior to measures of financial performance prepared in accordance with GAAP. A table that outlines the reconciliation between the non-GAAP financial measures to GAAP financial measures is included in our earnings release, which we have filed with the SEC. I refer investors to this release.
I would now like to turn the call over to Jerry.
Thanks, Jim. Revenues for the quarter ended were 116.6 million down from 120.3 million in the prior quarter and in line with our April updated revenue guidance for the quarter. Revenues from greater than 10% customers included Huawei at 18% and Alcatel at 10%. Our revenues for the quarter were impacted by inventory corrections at many of our telecom customers and by a general slowing among other telecom customers possibly attributable to caution in the phase of macro events occurring in March. We believe each of these conditions will continue to impact our revenues in the June quarter and they are likely to have a more significant impact in the June quarter than the March fiscal quarter just ended.
Even as these conditions arose within the March quarter, one major customer fulfill the portion of their original quarterly demand outlook which we appreciate however our expected revenues from them in the June quarter will be lower than will be otherwise expected with the result.
We continue to make progress in our new product introductions. We hope to have product revenue traction across many of these areas in the June quarter. However we would not expect this traction to deliver either meaningful revenues within the June quarter, our margin improvement in the June quarter in the case of new products at above average margin potential.
We do hope any related traction will help us establish our foundation for the potential second half revenue growth and margin improvement we discussed in the past. The new product introduction growth opportunities include tunable FFP, our cost size released 40 gig Gb/s, state transponder, early progress in our 40-gig here in transponder, WSS products, external modulators were 40-gig, a significant ROADM line card program and various opportunities now in high powered laser, non-telecom product areas.
Our gross margins for the March quarter were 25% compared to 30% in the December quarter and lower than expectation so roughly and proportion of the level of our lower revenues compared to original guidance. Lower sales of our component level products and an adverse impact on our overhead absorption for the quarter. We expect this will continue to be a drag on gross margins from the June quarter as we expect the effectively inventory correction on related component revenues to be more pronounced in June, again in the March quarter just completed.
In addition as you know, we took a substantial portion of our annual price reductions on January 1. On our lower revenues in March with more difficult to generate cost savings to offset this price adjustments, we also do not get the advantage of scale that would come up with higher revenues. We also had approximately 1.5 million in excess in obsolete inventory reserves, higher than typical for us in the quarter so consistent with what can be expected when demand decreases.
We continue to make progress in our ramp of high powered lasers subsequent to or fab transfer however, not due to increased volumes nor the yield adjusted margins are, yet in a level to have a meaningful positive impact on overall company results. Demand in these markets continued strong however.