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SDL soars past estimates
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October 19, 2000: 4:45 p.m. ET
Optical networking components maker's 3Q revenue triples on strong demand
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NEW YORK (CNNfn) - The optical networking components maker SDL Inc. reported third-quarter net income that blew past analyst estimates, as its revenue tripled from the same period last year.
On a pro forma basis, San Jose, Calif.-based SDL (SDLI: Research, Estimates) reported third-quarter net income of $40.4 million, or 45 cents per share, an increase of 420 percent over the $7.8 million, or 11 cents per share, recorded in the same period last year. The mean of the analysts' estimate for SDL's earnings was 38 cents per share, according to earnings estimate tracker First Call.
Revenue tripled to $146.5 million from $47.5 million, while gross margin quadrupled to $82.9 million from $20.9 million. Before the results were released, CS First Boston analyst James Parmelee had estimated that SDL would report quarterly revenue of $140 million and earnings per share of 37 cents.
"We would assign a high probability to revenue of $145-$150 million and earnings per share a couple of pennies above our view," Parmelee said before Thursday's earnings release. "There is potential for upside as a function of robust demand for terrestrial 980nm pump laser/module shipments."
"SDL's record financial performance in the third quarter reflects our leadership position in multiple sectors of the fiber optics communications market," said CEO Donald Scifres in a statement. "Demand remained exceptionally strong in both terrestrial and undersea segments, both in traditional areas of SDL leadership, such as pump lasers, as well as in emerging product areas such as Raman amplification and optical transmitter and receiver modules."
"In order to serve this growing backlog of orders, we have started or have plans to expand all of our manufacturing facilities around the world," Scifres added.
SDL stock closed Thursday up $10.25 at $289.12, amid a powerful rally among all tech stocks. The company's stock is almost eight times higher than its 52-week low of $37.56
Last July, SDL agreed to merge with rival JDS Uniphase (JDSU: Research, Estimates) in a transaction valued at $41 billion, based on the companies' July 7 stock prices. 
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