Oclaro to beat guidance as it beats Thailand flooding

Oclaro Inc. (NASDAQ: OCLR) says that it has made significant progress in its efforts to circumvent the effects of the Thailand flooding on its production capabilities. It also says that preliminary scrutiny reveals it should reach a revenue figure of approximately $86 million for the fiscal second quarter ended December 31, 2011, $1 million more than the top end of its original guidance.

Jan 5th, 2012

Oclaro Inc. (NASDAQ: OCLR) says that it has made significant progress in its efforts to circumvent the effects of the Thailand flooding on its production capabilities. It also says that preliminary scrutiny reveals it should reach a revenue figure of approximately $86 million for the fiscal second quarter ended December 31, 2011, $1 million more than the top end of its original guidance.

Company executives indicated the success of its flood-related action plan was a factor in its ability to beat guidance.

"Our top priority has been to restart production in Thailand following the intensive floods, and minimize any impact to our customers," said Alain Couder, chairman and CEO of Oclaro, via a press statement. "As a result of the efforts of our teams in Thailand and around the world, we have made substantial progress in restarting production for our affected product lines. These efforts have also contributed to our achieving preliminary revenues for the December quarter above the top end of our guidance range."

Oclaro expects production of four of the five flood-affected product lines to have resumed at Fabrinet's Pinehurst facility by the end of the month. Specifically:

  • Commercial shipments of high-powered lasers resumed in November, and production capacity is currently at pre-flood levels.
  • Commercial shipments of amplifiers resumed in the last week of December and production capacity is expected to increase to pre-flood levels by the end of the March quarter.
  • Commercial shipments of tunable dispersion compensators are expected to begin by the end of this month. Production capacity is expected to reach pre-flood levels by the end of the March quarter.
  • Commercial shipments of lithium niobate external modulators are expected to begin by the end of the month, with production capacity returning to pre-flood levels early in the June quarter.
  • Commercial shipments of WSS products are expected to begin at the end of the March quarter and production capacity is expected to return to pre-flood levels in the June quarter.

To fill the demand for these latter two products, limited commercial output of lithium niobate external modulators and WSS products has begun from some of Oclaro’s Western production facilities.

Oclaro anticipates approximately $6 million in capital expenses in each of the second (December) and third (March) fiscal quarters, figures that include expenses related to recovering the product lines lost during the flood. The company expects to receive insurance payments that will defray at least someof these costs.

Couder told analysts last November that he expected the flood impact to cost Oclaro $25 million to $30 million in lost revenue in the just-ended quarter and another $10 million to $20 million in the company’s fiscal third quarter, which ends March 31, 2012 (see “Oclaro expects Thai flood to affect two quarters”).

More in Business