This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

Oclaro's Ugly Outlook Casts Shadow

Updated with added information about Oplink's results.

NEW YORK ( TheStreet) -- Oclaro (OCLR - Get Report) was hit with a spate of order pushouts and cancellations in mid-September, and the whole optical networking sector felt the pain on Thursday.

The San Jose, Calif.-based Oclaro is a smaller player but the depth of its miss in its fiscal first-quarter ended Sept. 30 as well as its below-consensus outlook for the December period still took a heavy toll on the group.

In addition to Oclaro's plus-37% drop, JDS Uniphase (JDSU - Get Report), which was downgraded by RBC Capital, fell 11.4% to close at $10.24; Finisar (FNSR - Get Report) lost 6.5% to $16.86; Ciena (CIEN - Get Report) fell 3.1% to $13.32; and Oplink Communications (OPLK), which was downgraded along with Oclaro by BWS Financial, tumbled 15.2% to $15.25.

"Overall demand drivers remain, yet we believe the overall trend of book-to-bill in this optical component segment may be decreasing from a month-to-month point of view," said RBC Capital in its note detailing the downgrade of JDS Uniphase to market perform from sector perform. "Oclaro's revenue miss may accentuate this point."

The firm also cut its 12-month price target on JDS Uniphase's stock to $13 from $16 and trimmed earnings expectations for other companies in the group.

BWS Financial lowered its rating on Oclaro to sell following the company's poor outlook and set a 12-month target price of $6.50 on the stock, implying further downside of more than 25%.

"Demand trends have changed significantly as telecom customers are delaying some capital expenditure programs, which is leading to communications equipment manufacturers' reliance on finished inventory," said the firm said in its note, adding later: "We would expect the group to see further selling pressure as peers release earnings reports showing increased inventory levels and pushed out customer purchasing trends."

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
CIEN $20.91 0.58%
FNSR $21.07 1.35%
JDSU $13.32 -0.52%
OCLR $1.64 2.50%
OPLK $24.23 -0.12%


DOW 18,214.42 -10.15 -0.06%
S&P 500 2,110.74 -3.12 -0.15%
NASDAQ 4,987.89 +20.7530 0.42%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs