Riding interest in 100-Gbps optical transmission technology, Oclaro, Inc. (NASDAQ: OCLR) set records for gross margin and operating income in the fourth quarter of fiscal 2016, which ended July 2, 2016. The quarter capped a year of significant improvement in the optical components and subsystems company's performance.
Results in major reporting categories showed both sequential and year-on-year improvements. GAAP gross margin was 32.1% for the quarter, up from 26.7% in the third quarter of fiscal 2016 and 19.3% in the year-ago quarter. Non-GAAP gross margin was 32.4%, also better than the 27.2% in the prior quarter of fiscal 2016 and 19.9% in the fourth quarter of fiscal 2015.
Oclaro reported GAAP operating income of $12.8 million for the fiscal fourth quarter of 2016, more than $10 million greater than the $2.5 million recorded in the third quarter and well ahead of the GAAP operating loss of $10.8 million it suffered in the fourth quarter of fiscal 2015. Non-GAAP operating income for 4Q16 was $14.9 million, up from $4.6 million in 3Q16 and again much better than the non-GAAP operating loss of $5.4 million reported in 4Q15.
Four quarter revenues were $125.2 million on a 14-week quarter, ahead of the previous quarter's $101.1 million and the $82.2 million earned in the fourth quarter of fiscal 2015.
"Our excellent performance was driven by the strength of our 100G product line revenues, which grew 36% sequentially, including a significant contribution from our CFP2-ACO product line," said Greg Dougherty, Oclaro's CEO, via a press statement.
For the fiscal year, Oclaro saw revenues of $407.9 million for fiscal 2016, up from the prior year's $341.3 million. Year-end GAAP gross margin was 28.5% versus 16.6% in fiscal 2015, while non-GAAP gross margin was 29.0% versus the previous year's 17.2%.
Fiscal year 2016 GAAP operating income was $15.8 million, a marked turnaround from fiscal 2015's GAAP operating loss of $45.5 million. Non-GAAP operating income was $25.1 million versus a non-GAAP operating loss of $38.4 million in fiscal 2015.
GAAP net income for fiscal 2016 was $8.6 million, again a distinct improvement over fiscal 2015, when Oclaro suffered a GAAP net loss of $56.7 million.
"I am very pleased with our performance and annual results for the past year, which reflect the progress that we have made," Dougherty commented. "Our annual revenue grew by 20% when compared with fiscal year 2015, and we achieved an annual operating profit. Entering fiscal 2017, we are well positioned for ongoing revenue growth as our product mix continues to shift towards 100G for both our client- and line-side businesses. I am proud of what the Oclaro team has accomplished and look forward to another successful year in fiscal 2017."
In fact, Dougherty told attendees on an analyst call August 2 that he expects fiscal year 2017 revenues to grow at least 30% over the just concluded fiscal year. Along those lines, the company forecasts revenues for the first quarter of fiscal 2017 to range between $126 million and $134 million. Management expects non-GAAP gross margin in the range of 30% to 33% and non-GAAP operating income in the range of $12 million to $16 million.
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