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To: 2MAR$ who wrote (516)	1/30/2001 11:34:35 PM
From: 2MAR$	Read Replies (1) \| Respond to of 762

NUFO ( run= $56 ah) raises guidance sharply, shares jump (UPDATE: Adds background, updates share price) SAN JOSE, Calif., Jan 30 (Reuters) - New Focus Inc. (NasdaqNM:NUFO - news) on Tuesday reported quarterly earnings that shot past expectations and raised its forecast for revenues in the coming year by 60 percent because of strong demand for its optical networking products. New Focus shares shot higher in reaction to the stronger-than-expected results. The stock was bid at $54-8/8 on the Instinet system, a gain of more than 10 percent in after hours trade from the Nasdaq close. The company reported pro forma net profits of $2.6 million, or 4 cents per share. That was far better than the average forecast for an operating loss of 3 cents in the quarter, according to First Call/Thomson Financial. Net revenues increased by 52 percent in the quarter ending Dec. 31 from the prior quarter to $33.9 million, up from $6.8 million in the year-earlier period. The biggest share of the gain came from fiber optic products, which accounted for $25.3 million of sales and registered a 70 percent sequential gain. The company said that it had not seen evidence of any slowdown in the telecommunications market since its products promise rapid gains in the efficiency of long-haul optical networks. ``While there may be some slowdown in the traditional portions of the network, they are still spending on the leading edge optical products,'' chief financial officer Bill Potts told Reuters. New Focus also raised its forecast for revenues in fiscal 2001 to $240 million from an earlier forecast of $150 million, an increase of 60 percent. The company said that it expects between 20-25 percent of those sales to come from new products, with especially strong demand for fiber amplifiers. Gross margins improved to 31.3 percent in the fourth quarter, up from 22.5 percent in the previous quarter. New Focus said it had ramped up production at one plant in Shenzhen, China and began production at a larger plant there in the quarter and that yields at the lower-cost plants were running at levels that matched U.S. levels. The Shenzhen plants took over about 90 percent of the production of the main line of fiber optical gear in the quarter, accounting for the improvement in margin, Potts said. New Focus said it would almost double capital spending in the current year to $90-$100 million from $52 million in 2000, including production of a new tunable laser that promises telecom providers more flexibility in backing up and re-configuring networks. That product is expected to be released in the fourth quarter and to ship in volume in 2002, Potts said. Major clients in the fourth quarter included Corvis Corp. (NasdaqNM:CORV - news), which accounted for 17 percent of sales, Agilent Technologies (NYSE:A - news) (16 percent), and Corning (NYSE:GLW - news) (11 percent), the company said. In December New Focus announced that it had added a fifth customer for its next-generation fiber optic components, which it said would account for as much as 10 percent of revenue in the near future. The company aid that it had booked 68 percent of its sales to U.S.-based clients and that a full two-thirds of sales had been for passive optical products, which do not require an electric boost to operate. In addition to its communications products, New Focus also sells testing and measurement devices, which accounted for net revenues of $8.6 million in the fourth quarter. In January, New Focus completed a $363 million purchase of JCA Technology, which specializes in microwave electronics and packaging. The company projected that the merger would boost revenues and margins in the first full quarter of joint operations. New Focus share are still down from a 52-week high above $165, but have rallied by 40 percent since the start of the year. The Nasdaq Composite is up 15 percent over that period. Email this story - Most-emailed articles - Most-viewed articles