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For its fiscal third-quarter 2008 (to end March), photonic component, module and subsystem maker Oplink Communications Inc of Fremont, CA, USA has reported revenue of $40.8m, up 47.8% on $27.6m a year ago (which did not include results from subsidiary Optical Communication Products Inc, acquired at the end of October) but down 17% on last quarter’s $48.9m. This is slightly higher than the revised guidance of $39-40m (given in late March) but lower than the previous guidance of $41-45m (provided at the end of January).

The sequential decline in revenue is due to reduced sales of reconfugrable optical add-drop multiplexers (ROADMs), softness in orders from Europe, and the transfer of OCP’s manufacturing to China (where Oplink has facilities in Zhuhai and Shanghai).

Net loss was $3.9m ($0.19 per basic and diluted share), compared to net income of $4.3m ($0.19 per diluted share) a year ago. Excluding one-time charges including $6.4m in provision for excess and obsolete inventory and $547,000 in transitional costs for contract manufacturing, non-GAAP net income was $2.5m, down on $5.3m a year ago.

“We continued to make significant progress transitioning OCP’s business to Oplink’s model,” says president and CEO Joe Liu. During the quarter, Oplink completed its sale of OCP’s facility at Woodland Hills, CA, USA and sold the wafer fab equipment from OCP Asia in Taiwan, contributing $26.2m to cash, cash equivalents and investments rising from $117.3m to $138.3m. “Transferring OCP’s production to China and other measures we have taken to reduce OCP’s cost structure contributed to our sequentially higher gross margins.”

Reduced ROADM sales, softness in orders from Europe, and the transfer of OCP’s manufacturing to China will continue to affect revenue in the fiscal fourth-quarter 2008 (to end June), believes Liu. Oplink expects revenue to fall again to $33-37m. “However, we remain optimistic about our broader product portfolio and long-term opportunities once we complete the transition and release new product designs in the coming quarters,” he adds.

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