Thanks, Glenn. A couple of comments:
- next to the 2x to 3x ramp of capacity (according to KK's projection), I thought that one of the most interesting comments was Dr. J's somewhat testy response to the questioner (whose affiliation I didn't catch) re. optical switches. Dr. J jumped right on that as if it had been a hot button. If I captured it correctly, he said the following:
We have good technology. The likely first application will be for add/drop multiplexing, but we don't see customer demand for it yet. [I inferred this to mean the nets don't accommodate this yet, of which this thread is pretty well aware.] But when the demand materializes, "we will be there", or some such assertion.
- On the R&D, I thought that the drop to 7.5% from the guidance of 9% was not an adjustment of outlays so much as simply a function of revenues exceeding forecast. That is, I don't think absolute spending on R&D dropped below budget.
- Some disappointment in analyst community with the slight dip in gross margins. The reason was clear and predictable: with the ramp in operations, there is going to be slippage, plus the technical reason in reclassifications of some inventory units due to the merger, which affected COGS. This apparently excluded the inventory charges attributable to the merger.
I think gross margins will be a factor going forward in analyst concerns if for no other reason that you are looking at a 2x to 3x ramp in capacity, with new hires, new machinery, integration issues--it will have an impact. Growing pains. (If this is pain, I'll take it! <g>)
- two other surprises: focus on filters and fact that revenue growth rate in cable business has been equal to or greater than any other segment.
Hope things are going well in your new endeavours. Steve |
