Fiber-optic firm lowers its forecasts

Bookham says losses grew in 1st quarter, 2nd could be worse

`They are feeling pain'

U.S. headquarters in Howard unaffected by layoffs in Britain

April 26, 2001|By Stacey Hirsh | Stacey Hirsh,SUN STAFF

Despite revenue that more than quadrupled, Bookham Technology PLC, a British maker of fiber-optic components that has its North American headquarters in Howard County, said yesterday that its losses widened in the first quarter and it lowered its financial forecasts for the second quarter.

"Although visibility is not clear at this time, we expect a reduction in [the second quarter] in top-line revenue of anything from 25 percent to as much as 40 percent," said Giorgio Anania, president and chief executive of Bookham.

Analysts attributed Bookham's revised forecasts to a slowdown in the telecommunications sector.

The company also announced yesterday that during the first quarter it laid off 17 percent of its work force overseas, or 166 workers. That is 2 percent more than the company previously announced. Employees were offered severance packages to leave voluntarily.

The net loss in the quarter that ended April 1 was $15.3 million, excluding the cost of the severance packages, compared with a loss of $7.8 million in last year's first quarter. Including the severance packages, this quarter's net loss was $17.7 million.

Revenue in the quarter was $16.5 million, up 365 percent from the corresponding period last year. The company did not disclose the revenue figure for the first quarter of last year.

"They delivered what they promised in the estimates," said Igor Ilic, an analyst who covers Bookham and the optical components industry for Robertson Stephens in San Francisco. "But clearly they are feeling the pain that the entire communication industry is feeling based on the slowdown in spending by the service providers."

Bookham, which makes silicon-based chips that work as building blocks to help information flow along fiber-optic networks, has two core products.

The first helps cram more data into a single fiber. That technology can take streams of data from several home computers in one city, pull them together and haul them to another city.

The second takes digital data from a home or office computer, translates it into light pulses and transmits it through a fiber-optic network.

The company's North American headquarters and manufacturing plant, which opened in January, will be used to make the latter product. A company spokesman said the layoffs do not affect the Columbia plant, which is still on schedule to be up and running in the third quarter.

Bookham said it sold to more than 40 customers last quarter. Nortel Networks Corp. was its largest customer, accounting for 36 percent of sales in the quarter.

The company also acquired Measurement Microsystems A-Z Inc. of Canada last quarter for about $47 million, of which about $10 million was paid in cash.

Bookham's American depositary receipts closed yesterday at $4.17, up 5 cents.

Ilic of Robertson Stephens said that though the price is low, it could turn around. "The technology they are developing has huge leverage," he said, "and going forward there's a potential upside in that stock."

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