Some interesting information about Oclara, their growth and thoughts on 2016 -

"Earlier this month, optical component and module supplier, US-based Oclaro, revealed a key milestone in its first quarter 2016 financial results that set investors buzzing.

By generating its first positive adjusted EBITDA of $4.2 million, it had spectacularly increased what is essentially net income, by $25 million in just two years.

At the same time, $87.5 million revenues came in at the high end of guidance, up by more than $5 million from Q4. And gross margin reached 26%, marking an increase of 6% from last quarter.

Clearly the results spell good news for a company that has recently taken severe measures to reach profitability.

In 2014, chief executive, Greg Dougherty, announced a major re-structuring programme, culling staff numbers by some 50% to 1500.

Meanwhile, operating sites were reduced and the company's GaAs laser diode business sold to II-VI for $115 million, bringing in some $88 million in cash.......

.......According to Oclaro's Dougherty, latest quarterly revenues were primarily driven by its 100G product lines. 100G product revenue grew by $7 million, or 20%, compared to the previous quarter, and now represents some 47% of total sales.

This isn't an enormous surprise. While 100 Gigabit Ethernet has been a long time coming, industry pundits predict 2016 is set to be a breakthrough year.

IHS Infonetics, for one, has predicted next year will be 'huge' for 100G as products reach market and Internet content providers, for example, shift from 40G to 100G optics, driving sales.

Anticipating rising demand for 100G transceivers, Oclaro increased capacity for its 100G client-side transceivers in early 2015 and has been sampling its QSFP28 transceiver to data centres upgrading to 100G infrastructures

It has also started shipping its DWDM lineside analog-coherent transceiver - deemed to be the company's 'biggest deal' by Henderson - for deployment in this quarter.

And pleasingly for Oclaro, demand from China, for client and lineside 100G products, is rising. According to Dougherty: "It appears our customers are preparing for awards for 100G systems from China Mobile and China Telecom... and we expect to see continued 100G sales growth in China."

Henderson concurs, and points out that other industry players including MACOM, Inphi, Oclaro and Lumentum are also reporting ramping China orders.

"This demand is likely to cause abnormal demand in the first half of 2016," he says. "If stronger China demand picks up enough, it could cause [Oclaro's] March quarter to buck seasonal patterns, resulting in even earlier [profitability]."

So the future looks bright for Oclaro. With shrewd product development beginning to pay off, it has nearly clawed its way back to profitability.

But competition is fierce, and size-wise, the company is small compared to the likes of Finisar and even NeoPhotonics. Could scale be an issue?

Henderson thinks not. "Competition is stiff in VCSEL short range optics but less so in [Oclaro's] high-end integrated segment," he says, "Also, we do not see China-based players moving up in scale with the fab and integrated optics capabilities."

http://www.compoundsemiconductor.net/article/98168-oclaro-hits-2016-on-a-high.html