I agree with Archer. The Western Cable Show is likely to give strength to all these stocks. Also see where Ortel reported earnings today. Perhaps it's an indicator.
Regards, Mark
Ortel Reports Second Quarter Results; Board of Directors Authorizes Share Buyback Program
Business Wire - December 01, 1998 16:59
ALHAMBRA, Calif.--(BUSINESS WIRE)--Dec. 1, 1998--Ortel Corp. Tuesday reported financial results for its second fiscal quarter and six-month period ended Oct. 31, 1998.
Additionally, the company announced that its Board of Directors has authorized the repurchase of up to one million shares of Ortel common stock in the open market or through private transactions from time to time as market and business conditions warrant. At Oct. 31, 1998, Ortel had approximately 11.9 million shares of common stock outstanding.
The company earlier announced that it would likely incur a net loss in the second quarter and discussed plans to discontinue its 980nm pump laser business unit. The decision to discontinue the business unit reflects unfavorable future earnings prospects predicated on a market-wide steep price decline and the company's relatively late entry into the market.
All prior quarters' numbers have been reclassified to conform to the current period presentation.
For the current second quarter, revenues from continuing operations totaled $19.8 million, up 7% from $18.4 million, as reclassified, in the preceding quarter and down 9% from $21.7 million, as reclassified, for the same period a year ago. Income from continuing operations totaled $211,000, or $0.02 per diluted share, versus $2.2 million, as reclassified, or $0.17 per diluted share, a year ago.
After giving effect to a $4.8 million after-tax charge ($0.39 per share) related to the discontinuance of the 980nm pump laser business unit, the company recorded a net loss of $4.6 million, or $0.37 per share, for the current second quarter. This contrasts with net income in the second quarter a year ago of $1.9 million, as reclassified, or $0.15 per diluted share.
Ortel noted that it has reorganized its operations in order to focus on its core competencies and return the company to profitability. The reorganization involved a streamlining of the reporting structure and cost reductions to bring operating expenses in line with the company's tightened market focus. The benefits of this reorganization on the income statement should begin to be reflected in the third fiscal quarter.
For the first half of fiscal 1999, Ortel recorded income from continuing operations of $935,000, or $0.07 per diluted share, which compares with income from continuing operations in the corresponding year-earlier first half of $4.0 million, as reclassified, or $0.31 per diluted share. After giving effect to the second quarter charge for discontinuance of the business unit, the company reported a net loss in the first half of the fiscal year of $4.4 million, or $0.35 per share, versus net income in the prior year's first half of $3.4 million, as reclassified, or $0.27 per diluted share.
Revenues for the current six months totaled $38.2 million, down from $41.3 million a year ago.
Broadband revenues in the current second quarter rose to $13.1 million, up 8% on a sequential basis from $12.1 million in the preceding first quarter, and up 5% from $12.5 million in the comparable period last year.
Revenues from other business, including satcom and wireless, were up 5% sequentially, although down 27% from the second fiscal quarter a year ago.
Total international revenues for the current second fiscal quarter of $6.6 million represented 34% of total revenues and were up 5% sequentially from the first fiscal quarter, but were down 40% from the second quarter a year ago.
"As demand for new voice, data, Internet access and other interactive services over cable increases, we are seeing a resurgence in spending by domestic CATV operators to upgrade their networks," said Wim H.J. Selders, Ortel's president and chief executive officer.
Selders added: "We see both 1310nm and 1550nm-based solutions playing different but important roles in the continuing upgrade of hybrid fiber/coax (HFC) networks. Since the high cost of all 1550nm technology in distribution systems prevents its universal implementation, the combination of 1310nm laser technology for distribution and 1550nm laser technology for long link transmission continues to be the most flexible, complete cable television architecture available. Ortel has recently received orders for its new 1550nm laser for wavelength division multiplexing in certain cable architectures. At the same time, 1310nm laser technology, which we pioneered a decade ago, is clearly the industry's leading technology for the distribution portion of HFC networks."
Selders also said, that with recent announcements of supply agreements with Blonder Tongue and Golden Sky, the company is well positioned to capitalize on fiberoptic opportunities in the satellite communications industry for both earth station and multi-dwelling unit applications.
"In the wireless area," Selders continued, "although we have one of the broadest product offerings of wireless repeaters incorporating leading edge technology, our results have not met our expectations. Nevertheless, we are determined to realize the value that we have created, particularly as operators recognize that their digital networks will require significant improvements in coverage to satisfy the expectations of their customers."
Selders concluded: "Although we don't anticipate revenue increases in the third fiscal quarter, primarily due to product mix, the measures we have taken this past quarter, together with our leadership positioning in our core markets, reinforce our confidence in Ortel's ability to build for growth and improve profitability."
This news release contains forward-looking statements regarding Ortel's results of operations or financial condition. Factors that could cause actual results to differ materially include changes in the capital spending of CATV operators, changes in customer order patterns, introduction of new products by competitors, and other risks identified from time to time in the company's SEC filings, including those described under Item 1 of the company's Form 10-K for the fiscal year ended April 30, 1998.
Ortel designs, manufactures and supplies advanced solutions to original equipment manufacturers for the transmission of video, voice and data. The company applies its core technology strengths in semiconductor optoelectronics, fiberoptic transmission and radio frequency electronics to enhance capacity, improve quality and lower costs for broadband cable television networks, as well as for satellite, telecommunications, and wireless applications. The company has headquarters in Alhambra, and has international operations in Sweden, Germany, France, Singapore, and China. |
