Despite the recent slowdown of technical stocks on Wall Street, fiber-optic component companies are exceeding earnings and revenue estimates due to insatiable demand. E-TEK Dynamics Inc. (San Jose, CA) is continuing that trend, announcing financial results for its third fiscal quarter, which ended April 1. Earnings per share were three cents higher than expectations, and net revenues rose 83%.
The company is also taking a positive stance for operations going forward and is optimistic about closing its merger with JDS Uniphase (Nepean, ON, Canada) by the end of the current quarter. "The merger is proceeding along as expected," remarks Sanjay Subhedar, E-TEK's COO and CFO.
Net revenues for E-TEK's third quarter were $90.6 million, compared with $49.5 million for the same period last year, an increase of 83%. Pro forma net income, which excludes the amortization of purchased intangible assets, was $17.3 million, compared with $8.7 million for the third quarter of fiscal 1999. Actual net income for the third quarter was $12.1 million, compared with $8.7 million in the same period last year. Net revenues for the nine months ended April 1, 2000 were $223.4 million, compared with $121.1 million for the same period of fiscal 1999, an increase of 84%.
Key to staying on top of the high-demand components market is the ability to ramp up production. E-TEK stresses that it will be soon breaking ground on its China manufacturing plant to ease capacity issues. With an estimated 300,000 square feet available later this year in China, E-TEK will almost double its manufacturing capacity while decreasing expenses with a facility in a low-cost country.
The company also plans to increase output in other ways. Along with capacity expansion, E-Tek is witnessing increased yields in its manufacturing processes. "The demand has always been there," says Subhedar. "What we did better this quarter was execution--the capacity increases we've been making and the yield increases we've been making all came together this quarter."