It sounds like the management of Avanex
This week's earnings report was full of glowing assessments of the future, and the conference call was no different. The maker of advanced optoelectronic components just completed its first breakeven quarter on a pro forma basis, with all the revenue and margin trends pointing to even better results to come.
As CEO Jo Major explained it, the $51 million in current quarterly revenue is just enough to balance the books. Any increase in sales should mean stronger profits, as many of the costs are fixed in nature. Major said that the company's "operating structure is sufficient to handle substantially higher levels of revenue and that we are now focused on investing in profitable growth."
Avanex isn't the only game in town when it comes to high-speed optical components. Rivals like JDS Uniphase
Avanex lists giants like Alcatel-Lucent
That's a high-octane customer base on which to build a thriving supplier business. The cash crunch is coming to an end, and I'd be surprised to see another 20% stock dilution come next year. And copper is so old and busted -- the future is optical and wireless, and Avanex will do well as long as the world needs more networking equipment. Yes, that's basically forever.
This company, and its entire sector, is worth watching. Closely.
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