Fiberoptics Industry Report

Sept. 1, 2001
Lucent sells fiberoptics business, releases disappointing quarter numbers; lcatel wins, acquires Kymata; JDS Uniphase loses $7.9 billion, cuts jobs...
Lucent sells fiberoptics business, releases disappointing quarter numbersLucent Technologies (Murray Hill, NJ) announced in July the long-awaited sale of its fiberoptics business, along with disappointing quarterly financials. These include a net loss of $3.25 billion and a new phase of restructuring that could cause another 20,000 employees to lose their jobs (along with about 15,000 others lost already this year). Furukawa Electric Company agreed to pay $2.5 billion in cash and securities for Lucent's Optical Fiber Solutions Group in Norcross, GA, and associated plants. Third-quarter 2001 revenues of $5.82 billion were down 21% from the same time last year, and 1% from $5.92 billion in the second quarter. The company's dividend has been discontinued. As the dust settles, Lucent will be organized around two major segments—Mobility Solutions and Integrated Network Solutions—that it hopes will bring better focus and reduced costs.Alcatel wins, acquires KymataAlcatel Optronics (Paris, France), which manufactures optoelectronics components for telecommunications systems, won the bidding to acquire privately held Kymata Ltd. (Livingston, Scotland), a key player in planar technology for high-end, passive optical-network components. Under the terms of the agreement, Alcatel shares will be exchanged for all outstanding shares of Kymata; based on closing price in Paris on July 27 the transaction has an implied value of $118 million (€134 million). By bringing Kymata into its fold, Alcatel confirms its strategy to move into the integration of active and passive optical components for the metro market. Other companies that considered buying Kymata were Santa Clara-based Intel, London-based Marconi, San Jose-based Cisco Systems and Brampton, Ontario-based Nortel Networks.JDS Uniphase loses $7.9 billion, cuts jobsOptical-networking equipment maker JDS Uniphase (San Jose, CA) will eliminate 7000 additional jobs (9000 had already been cut) and close some operations after losing $7.9 billion in its fiscal fourth quarter and $50.6 billion for the year—believed to be the largest annual loss ever. Much of the loss resulted from writing down the value of companies it had recently acquired over two years of rapid expansion. JDS Uniphase also announced it was closing several operations, including those in Asheville, NC; Freehold, NJ; Richardson, TX; Rochester, NY; and some overseas facilities. The cuts are expected to save about $700 million annually.Corning downsizes, halts dividendsCorning Incorporated (Corning, NY) announced more layoffs and the closing of three facilities in a restructuring plan to lower the cost of its Photonic Technologies business that develops and manufactures photonic products. Revenues were $1 billion in 2000; sales this year are expected to be in the range of $600 million to $700 million. The layoffs from these actions bring the total of job reductions to 5900, roughly 15% of Corning's global workforce of approximately 40,000. The company also announced a halt to dividend payments.New funds and facility for Intense PhotonicsIntense Photonics (Glasgow, Scotland) secured $11 million in funding and acquired the DuPont Photomask fabrication facility in nearby Hamilton, Scotland. The company plans to commercialize its photonic integrated circuits, based on quantum-well intermixing as a reliable platform for single-chip transceiver, switching, and routing subsystems for dense wavelength-division-multiplexing backbones.Also in the news . . .Lightconnect (Newark, CA), a designer and manufacturer of dynamic MEMS-based fiberoptic components, raised $15.8 million in second-round financing. . . . Avanex (Fremont, CA), a fiberoptic-network components producer, announced a fourth-quarter income shortfall—reaching only $18 million in sales instead of its expected $25 million. . . . Optical-networking products manufacturer Celion Networks (Richardson, TX) secured $45 million in a second round of financing. . . . Luxcore Networks (Atlanta, GA) is redirecting its strategic focus to the manufacturing of optical subsystems, reducing its workforce while creating new jobs in fabrication, optoelectronics packaging, and manufacturing.

John Grady

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