Oclaro Raises Guidance

Oclaro, Inc. (OCLR - Snapshot Report) recently raised its guidance for the first quarter. The company now expects revenues between $82 million and $87 million, compared to the previous guidance of revenues between $75 million and $84 million. Oclaro, Inc. was formed in April 2009 combining Bookham, Inc., and Avanex Corporation. Oclaro, a Delaware corporation, designs, manufactures and markets optical components, modules and subsystems that generate, detect, amplify, combine and separate light signals principally for use in high-performance fiber optics communications networks. 

The company earlier reported in-line results for the fiscal fourth quarter. Management had stated that it expects only modest revenue growth in the remainder of calendar 2009 as the economic environment remains tough. The integration remains on track and the company will focus on achieving profitability in the coming quarters. 

By the June 2010 quarter, the company expects to achieve breakeven revenues of $80 million. Earlier, the company announced that it has received notification from the Listing Department of the NASDAQ that for 30 consecutive beginning August 3, 2009 the bid price for the company’s stock was below the minimum $1.00 per share required for continued listing under NASDAQ listing rules. 

Since receiving this notification on September 15, 2009, and through the close of markets on September 21, 2009, the closing bid price of the company’s stock has ranged from $1.00 to $1.09. Under the listing rules, the company has 180 calendar days, or until March 15, 2010, to regain compliance or else it will be delisted from the exchange. 

The company intends to continue monitoring the closing bid price of its common stock between now and March 15, 2010. The merger should give the new entity critical mass in terms of R&D investment and meaningful operating expense reductions. However, it remains to be seen if the company achieves the targeted synergies. We think the merger appears to be a sensible alternative in an already overcrowded component space.

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