Oclaro, Inc. (NASDAQ: OCLR) reported revenues below guidance for the third quarter of its fiscal 2012, at least in part due to a work stoppage at its Shenzhen facility. The company reported revenues $88.7 million in the quarter, versus its guidance of $90 million to $97 million (see "Oclaro weathers Thailand flooding in fiscal second quarter"). The company estimates the work stoppage cost the company about $4 million during the quarter, which ended March 31, 2012.
While the company hasn’t revealed what triggered the work stoppage, the facility is up for sale after Oclaro reached an agreement with Venture Corporation Ltd. (SGX: VENM.SI) to transfer the final assembly and test operations conducted at the Shenzhen plant to Venture's Malaysia facility over the next three years.
“Unfortunately, this [type of] work stoppage is becoming more common in this part of China,” Alain Couder, chairman and CEO of Oclaro, told attendees on an analyst call April 26.
In addition to the problems the job action caused, Oclaro saw flat sales of 40-Gbps modules and a decline in 10-Gbps module sales; combined, module sales decreased $2.1 million sequentially. Telecom components made up some of this shortfall, up $1.2 million sequentially. Amplification, filtering, and optical switching revenues did even better, increasing $3 million in the quarter.
Overall, the $88.7 million in revenues for the quarter represented a slight increase from the $86.5 million accrued in the fiscal second quarter.
One product that didn’t yet help was the MI8000 100-Gbps coherent transponder, which Couder said has yet to begin sampling. That process will begin “shortly,” Couder said on the call.
GAAP gross margin was 15% for the quarter, also a slight improvement versus GAAP gross margin of 13% in the second quarter of fiscal 2012.
Couder also repeated that revenues in the fourth quarter, which ends June 30, will continue to see a drag from flood-related production issues with the company’s wavelength-selective switch (WSS) and modulator products. Couder asserted these two production lines would be completely up to speed by the end of June.
Nevertheless, the company expects revenues overall to increase in the final quarter of the fiscal year. The company forecasted revenues to fall within the range of $100 million to $109 million.
Couder also said that he expects the Oclaro/Opnext merger to close in July.