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Technology Stocks : Oclaro, Inc. (Avanex-Bookham) -- Ignore unavailable to you. Want to Upgrade?

To: Gustaf who wrote (768)	10/30/2000 11:24:20 PM
From: r.edwards	Respond to of 2293

Demand Appears Very Strong; Book-To-Bill Slightly Below 2.0 Given renewed industry concerns about telecom capital spending trends we were encouraged by the strong upside revenue performance, the linearity of shipments, the healthy book-to bill ratio (now indicated to be slightly below 2.0) and the significantly increased outlook guidance. Despite investor concerns, demand was exceptionally strong in the September quarter as evidenced by the significant upside revenue surprise. This was further supported by linear shipment trends and a book-to-bill ratio slightly below 2.0. In addition, we were very encouraged by the increased outlook guidance. Management raised fiscal 2001 revenue guidance from approximately $134 million to $190 million. This should quell investor concerns about a broad-based slowdown in capital spending. The Best Is Yet To Come – PowerShaper Expected Ship For Revenues In FY 4Q-01 We remain very optimistic about the outlook for fiscal 2001 as the company moves its new dispersion compensation product, PowerShaper, from pilot production into commercial volumes. We believe this new product may in fact offer one of the largest market opportunities as carriers move to deploy high bit rate, high channel count, long haul networks. The company indicated (on its conference call with analysts) it expects PowerShaper to contribute to revenues in fiscal 4Q-01. PowerShaper should provide an additional top line demand driver as Avanex moves from a single product company to offering a suite of products and subsystem modules. Products Gaining Momentum We view Avanex as an exceptional optical component manufacturer who has developed a suite of products built around unique filtering technology. Avanex initially introduced a dielectric based filter, called PowerFilter, and it has expanded its product offerings to include products based on non-linear interferometer technology. In the June quarter, Avanex recognized initial revenue on PowerMux, its second commercial product. PowerMux is a next generation wavelength division multiplexer product that offers unprecedented performance of 800 channels at 10 Gbps. PowerMux revenues are primarily from Avanex’ s main customer MCI Worldcom, but the product is currently shipping to Nortel, Fujitsu and Sycamore Networks. Lucent, Siemens (SMAWY/$111.50), Cisco (CSCO/$52.25), NEC (NIPNY/$100), and a few other companies are at various stages of testing the PowerMux product. PowerExchanger, a “switchless” optical add-drop multiplexer based on PowerMux design principles, is tracking ahead of plan. The company recently shipped this product to Fujitsu and Cogent Communications and recognized first revenue in the September quarter. In looking at the Avanex product portfolio, we expect PowerFilter, PowerMux, PowerExchanger, and PowerShaper to be the key products that fuel revenue growth over the next 18 months. PowerRelay is another exciting product currently under development. PowerRelay is an optical amplifier for long haul applications and a critical piece to future mesh-based opticalnetworks. Avanex (AVNX:NASDAQ) Strong Buy 1 Avanex is a pioneer of “photonic processors” that accelerate the deployment of next generation optical networks. Avanex is headquartered in Fremont, California. Avanex Reports Outstanding September Quarter -Revenues 44% Above Expectations ¨ Avanex reported outstanding Sept. quarter EPS of $0.03 versus ($0.37) a year ago, significantly above our break-even estimate. ¨ Total revenues were an astounding $34.8 million, up 80% sequentially and significantly above our $24.2 million estimate. ¨ We are raising our fiscal 2001 and 2002 EPS estimates from $0.09 and $0.42 to $0.24 and $0.52, respectively. ¨ We view Avanex as one of the most exciting optical component manufacturers in the industry. Its leadership position in core filtering technology allows Avanex to offer discrete optical filter products, systems-level WDM products, optical add-drop multiplexers, and chromatic dispersion compensation products.