Here’s a quick snapshot of the PMC-Sierra (PMCS) FQ207 conference call.
- Revenue up slightly based on the strength of storage and FTTH chips
- Headcount down from 1182 to 1057 with a corresponding reduction in opex.
- “Market Conditions Improving”, with Video being cited as the big driver I still would like to see someone somewhere step up to the plate and quantify this effect. Without data this is another “internet traffic doubling every 9 months” type of proclamation
- Expected continued market improvement through the end of the year.
- Lots of storage design wins in SAS (Serial Attached SCSI) though it is still less than 10% of their storage business. Storage featured prominently in the “Design Win Parade” that characterizes investor calls for component companies (They never tell you what they lost).
- China is biggest area of strength, particularly in Metro Optical and Wireless Infrastructure. “Chinese OEMs are driving telecom growth”.
- FTTH revenue up in China and Korea. NTT committed to 3.2M ONU installs in Japan in the year ending March 08.
- More R&D directed at GPON. Bigger focus going forward. They think world will be 60%/40% GEPON/GPON while rest of world thinks 40/60. I agree with PMC.
- Some odd Q&A about Cable companies using PON. This is something I uncovered months back (see “PON Moves Towards the Enterprise“) but it is the first mention I’ve heard in a public forum from a public company. CEO Bailey backtracked a bit but it sounds like the cat is getting out of the bag. I’ve heard all kinds of stories about cable deploying fiber – I think the only conclusion one can reach at this point is they are going to do something beyond coax.
- Outlook is $112-$115M next quarter, up from $108.9 this Q. No mention what the deferred component will be next Q. I am assuming $112-$115 includes deferred revenue, which they don’t report on the formal P&L. This Pro Forma accounting is out of hand and the P&L is tough to digest. The key metric: Net Cash is up about $25M in the last 6 months.
Market liked the call. What did you think?
Author owns no position in PMCS