Opnext Quarterly Revenue Declines 12% to $70.5 Million

Opnext's sales decreased $9.7 million for the fiscal quarter ending in December, or 12.1%, to $70.5 million from $80.2 million in the quarter ended September 2008. The decrease affected all product lines except XFP products. There was a net loss of $14.5 million, or $(0.23) per diluted share, as compared to net income of $1.2 million, or $0.02 per diluted share, for the quarter ended September 30, 2008, and $4.3 million, or $0.07 per diluted share, for the quarter ended December 31, 2007.


Sales of 10Gbps and above products decreased $8.9 million, or 13.6%, to $56.7 million, while sales of less than 10 Gbps products decreased $0.6 million, or 6.7%, to $8.4 million, and sales of industrial and commercial product decreased $0.2 million, or 3.6%, to $5.4 million. However, sales increased $4.1 million, or 6.2%, from $66.4 million in the quarter ended December 31, 2007, primarily as a result of increased sales of XFP, X2 and SFP products, partially offset by lower sales of 40G and XENPAK modules.


Sales to Cisco and Alcatel-Lucent represented 35.2% and 15.9% of total sales, respectively, as compared to 38.6% and 14.6% for the quarter ended September 30, 2008, and 37.6% and 19.9% for the quarter ended December 31, 2007. Sales to the balance of the top ten customers during the quarter ended December 31, 2008 increased 4.4% sequentially and represented 31.8% of total revenue.


"The market weakness that we saw at the end of last quarter continued to impact our performance throughout the December quarter. We expect that weakness to continue in 2009. In addition, we are experiencing increased pricing pressure, an unfavorable product mix and the adverse effect of foreign currency exchange fluctuations. In this difficult demand environment, our focus is on continuing to serve our customer base, completing the integration of StrataLight, and reducing our expense structure while we continue to invest in R&D programs for our future. Our goal remains to enhance our industry leadership at the higher network speeds and expand our customer relationships as we address the continuing need for greater bandwidth," commented Harry Bosco, Opnext's CEO.
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