GigOptix Recovers on Product Introduction and Record Quarterly Revenue of $6.3M

Posted by on Jul 28, 2010 | No comment

GigOptix,Inc. (OTC BB: GGOX) stock recovered from July 9 low of $1.60 to July 28 price of $2.20 due to a significant increase in volume shipments over the last three quarters and strong outlook for the remaining of 2010. The average daily trading volume approached $100,000 for July, which was well above the average of approximately $50,000 registered for the last three months.

GigOptix is a leading fabless manufacturer of electronic engines for the optically connected digital world. It offers the broadest portfolio of high-speed electronic devices, including polymer electro-optic modulators, modulator drivers, laser drivers and TIAs for telecom, datacom, Infiniband and consumer optical systems, covering serial and parallel communication technologies from 1G to 100G.

Since the inception in July 2007, the company acquired iTerra, Helix, Lumera and recently ChipX, thus broadening the optical product lines and customer base.  As a result, through internal development and acquisitions, GGOX has assembled a portfolio of more than 60 products and 66 patents, establishing strong barriers for competition to enter.

The company reported record revenue of $6.3 million for Q2 2010, an increase of 19% over Q1 2010 and, 41% over the comparable 2009 quarter. The second quarter of 2010 represented the third consecutive quarter of sequential revenue growth that has exceeded $1.0 million per quarter.

Product revenue in the second quarter was driven by a significant increase in volume shipments across all the company’s high-speed optical markets. During the quarter, the Company also furthered its leadership position in 40G and 100G drivers and amplifiers as well as thin film polymer on silicon (TFPS) modulators, delivering a significant increase in revenue for 40G and 100G products of more than 200% from the preceding quarter.

Additionally, in June, GigOptix received more than $2.0 million in orders to supply 100G drivers in 2010 to a leading systems customer. GigOptix anticipated that 100G DWDM market could be one of its major growth engines for the company going forward. In the most recent report on 100G components, research company Ovum forecast that the 100G DWDM lineside market would launch in 2010 and grow to more than 16,000 units by 2015 with a CAGR of 140%.

During July, the company announced that its new GX6261, a 40G driver for Differential Quadrature Phase Shift Keying (DQPSK) systems has entered mass production and is now shipping in volume with  previously announced portfolio of GX3240 and GX3220 DQPSK receiver amplifiers to Tier 1 telecom customers. According to research Ovum research, 40G DWDM is one of the fastest growing segments in optical communications. In their most recent report on 40G components, Ovum forecast that the 40G DWDM market for DQPSK drivers would grow from $14 million in 2010 to more than $34 million in 2015 with a CAGR of 44%.

The strong growth of global IP traffic predicted by Cisco Visual Networking Index to soar 500% times from 9 exabytes/month in 2008 to 56 exabytes/month in 2013 and the focus of rich media content create momentum for GigOptix offering. Signals moving within chips are now reaching speeds enabled only by optical solutions, thus increasing the demand for higher speed infrastructure.

As a result of strong growth and additional orders received during July, GigOptix now expects third-quarter revenue to continue to grow, increasing between 5% and 8% on a sequential basis. Revenue growth would be driven by continued demand for 10G product line combined with ramping shipments of the products for 40G and 100G markets as major network providers accelerate the conversion of their existing systems.

While the company expects to significantly improve the profitability metrics, still it is unlikely for GigOptix to breakeven by the end of 2010. This fact could limit the stock price growth potential and wear away the eventual appreciation due to revenue momentum.

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About BeaconEquity.com

BeaconEquity.com is committed to producing the highest-quality insight and analysis of small-cap stocks, emerging technology stocks, hot penny stocks and helping investors make informed decisions. Our focus is primarily OTC stocks in the stock market today, which have traditionally been shunned by Wall Street. We have particular expertise with renewable energy stocks, biotech stocks, oil stocks, green energy stocks and internet stocks. There are many hot penny stock opportunities present in the OTC market everyday and we seek to exploit these hot stock gains for our members before the average daytrader is aware of them.

Beacon Equity Group Disclaimer

This newsletter is a paid advertisement and is neither an offer nor recommendation to buy or sell any security. We hold no investment licenses and are thus neither licensed nor qualified to provide investment advice. The content in this report or email is not provided to any individual with a view toward their individual circumstances. Beaconequity.com is a wholly-owned subsidiary of BlueWave Advisors.

While all information is believed to be reliable, it is not guaranteed by us to be accurate. Individuals should assume that all information contained in our newsletter is not trustworthy unless verified by their own independent research. Also, because events and circumstances frequently do not occur as expected, there will likely be differences between the any predictions and actual results. Always consult a real licensed investment professional before making any investment decision. Be extremely careful, investing in securities carries a high degree of risk; you may likely lose some or all of the investment.

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