Thursday, April 7, 2011

Opnext Trims Q1 Guidance -- Cites 10 Day Disruption in Japan

Opnext now expects revenues for its fourth fiscal quarter ended March 31, 2011 will be approximately $95.3 million, as compared to the original guidance for the quarter of $97.0 million to $102.0 million. The company blamed the revenue shortfall on a ten-day interruption in its module manufacturing operations in Japan following the earthquake and tsunami on March 11, 2011.

Opnext said its module assembly facility in Totsuka, Japan suffered minor disruption as a result of the March 11 earthquake and, while shipments of subassemblies to contract manufacturers and shipments of finished goods to customers from inventory each resumed on March 18, 2011, production at this facility was not reinstated until March 21, 2011.

The company's chip production facility in Totsuka suffered minor damage which has been repaired and the company is in the process of recalibrating and verifying the proper operation of the equipment at this facility prior to restarting full production, which is expected to resume by the end of April 2011.

Opnext's industrial and commercial production facility located in Komoro, Japan was undamaged and production at this facility resumed shortly following the earthquake. The Komoro facility is also being used to process pre-existing wafers from the Totsuka chip production facility pending full restoration of the Totsuka facility.

Opnext also continues to work with its suppliers affected by the earthquake and tsunami and related subsequent events to address component availability and, in certain instances, the Company is exploring alternative sources of supply. In addition, Opnext continues to be impacted by the planned power outages in the Totsuka area and the company is in the process of installing backup power capability to permit continuous operation.

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