Oclaro Recovers from Thailand Flood - Analyst Blog
January 17 2012 - 10:30AM
Zacks
Earnings estimates for Oclaro, Inc. (OCLR) have
declined a bit lately ahead of the second quarter results of fiscal
2012.
Earlier this month, Oclaro reported preliminary results for the
December quarter. The company now expects revenues of approximately
$86 million, surpassing management’s previous guidance of $75
million – $85 million.
The company remains keen to restart production in Thailand
following the intensive floods and minimize impact to customers.
The company has already restarted production in the affected
product lines.
Meanwhile, Oclaro currently expects four of the five
flood-affected product lines to have restarted commercial output at
Fabrinet's Pinehurst facility by the end of January. Oclaro stated
that commercial shipments of high-powered lasers resumed in
November and production capacity is currently at pre-flood
levels.
Oclaro stated that commercial shipments of tunable dispersion
compensators are expected to begin by the end of January and
production capacity is expected to increase to 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
January and production capacity is expected to return 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.
Meanwhile, Oclaro expects capital expenditures of approximately
$6 million in both the second and third quarter. The company will
have to incur this expenditure to recover product lines lost during
the flood although Oclaro believes it has adequate property and
business interruption insurance to cover its flood related
losses.
In addition, Oclaro expects to receive in excess of $10 million
in the March quarter related to an advance payment from the
insurance carrier.
Floods in Thailand adversely impacted companies like LSI
Corporation (LSI) and Opnext, Inc (OPXT)
resulting in a loss of production and hence affecting the
top-line.
We continue to maintain our Underperform recommendation on
Oclaro. Our recommendation is supported by Zacks #3 Rank, which
translates into a short-term rating of Strong Sell.
LSI CORP (LSI): Free Stock Analysis Report
OCLARO INC (OCLR): Free Stock Analysis Report
OPNEXT INC (OPXT): Free Stock Analysis Report
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