In a move that probably surprised few, Oclaro Inc. (NASDAQ: OCLR) announced after the markets closed yesterday that it expects revenues to fall short of the guidance it provided for the third quarter of its fiscal 2011. Like Finisar before it, Oclaro cited inventory corrections as the principal reason it would miss its target.
Oclaro originally projected during its 2Q11 earnings announcement January 27 that it would accrue revenues of between $123 million and $131 million in its fiscal third quarter, which ended April 2. It now says that revenues are more likely to be in the neighborhood of $116.5 million. That’s almost $4 million less than the $120.3 million it achieved during the second quarter of fiscal 2011, which ended January 1, 2011.
The company said it expects the smaller revenue to affect estimated gross margins and adjusted EBIDTA for the quarter.
In conversations with Lightwave at OFC/NFOEC, Alain Couder, president and CEO of Oclaro, acknowledged that his company had seen the same weakening of demand from China that Finisar had reported during its earnings call for fiscal 3Q11 in early March (see “How long will the optical communications correction last?”).
Also like Rawls, Couder expressed confidence that the correction would prove short term. The company reiterated that confidence in its announcement yesterday, citing:
- an expected book-to-bill ratio of approximately 1:1 in telecom for the third fiscal quarter, with particular booking strength late in the quarter
- scheduled new product introductions
- “the company's belief in the fundamental underlying demand for broadband.”
Oclaro will formally announce its 3Q11 financial results on April 28.