NeoPhotonics, a designer and manufacturer of optoelectronic solutions for the communications networks for telecom and data centres applications, announced financial results for its first quarter ended March 31, 2017, as follows:
1. Revenue for the first quarter of 2017 of $71.69 million, down 34.7% versus $109.84 million in the fourth quarter and down 27.7% from $99.14 million in the first quarter of 2016.
2. Gross income for the first quarter of $18.50 million, down 40.3% versus $31.03 million in the fourth quarter and down 40.5% from $31.12 million in the first quarter of 2016.
3. R&D expenditure for the first quarter of $15.54 million, up 2.4% versus $15.17 million in the fourth quarter and up 20.0% from $12.95 million in the first quarter of 2016.
4. SG&A expenditure for the first quarter of $16.36 million, up 30.0% versus $12.58 million in the fourth quarter and up 25.8% from $13.01 million in the first quarter of 2016.
5. Total operating expenditure for the first quarter of $30.38 million, up 4.1% versus $29.19 million in the fourth quarter and up 15.0% from $26.42 million in the first quarter of 2016.
6. On a GAAP basis, a net loss for the first quarter of $11.52, versus net income of $2.00 in the fourth quarter and net income of $2.31 million in the first quarter of 2016.
On a non-GAAP basis, a net loss for the first quarter of $10.74 million, versus net income of $6.29 million in the fourth quarter and net income of $6.95 million in the first quarter of 2016.
7. Cash, cash equivalents and short-term investments as of March 31, 2017 of $87.75 million, compared with $101.51 million as at December 31, 2016.
Additional results and notes
For the first quarter of 2017, NeoPhotonics reported that sales of high speed products were $58.7 million (82% of the total), with network products and solutions representing $13.0 million (18% of total revenue). Revenue excluding low speed transceiver products for the quarter was $70.2 million.
On a geographic basis by shipment destination, in the first quarter Americas revenue was 17% of total sales, compared to 18% in the fourth quarter, China accounted for 54% of the total, compared to 65% in the prior quarter, Japan revenue was 5%, compared to 4% in the prior quarter, with rest of the world sales 24% of the total, compared to 13% in the prior quarter.
For the first quarter, NeoPhotonic's stated it had two 10%-or-greater customers, with Ciena representing approximately 14% of total revenue, flat with the fourth quarter, and Huawei Technologies and affiliate Hi-Silicon Technologies accounting for 41% of total revenue, compared to 53% in fourth quarter, or 50% of total revenue excluding low speed products for that period.Outlook
For the first quarter ending June 30, 2017, NeoPhotonics expects revenue of between $68 and $74 million, representing a sequential decline of 1.0% at the midpoint.
CEO comment
Regarding the results, Tim Jenks, chairman and CEO of NeoPhotonics, said, "As expected, softness in the overall China market affected sales in the first quarter… I see the China market as being in a transition as it moves from primarily national backbone to provincial and metro 100 Gbit/s deployments, while worldwide the metro and data centre interconnect markets continue to grow at a rapid pace".
