Be prepared to look at the development of optical communication industry

Wall Street analyst team Doyle Publishing Ltd yesterday wrote on SeekingAlpha analysis of financial performance of the leading companies in the field of optical devices Finisar's. Their conclusion is pessimistic. If they have a good analysis, whether our industry in trouble fast.

In fact, a few days ago Finisar CEO Eitan Gertel sudden resignation if he had let the outside world because of poor financial performance of Finisar resign, although officially denied this claim Finisar. Doyle analysis to verify the financial problems may encounter Finisar. These problems can be summed up that is Finisar's profitability fell again, and the reason is behind the rise over the past few years COGS costs faster than sales growth. As a direct result, Finisar's ROA is only 0.07%, ROE was 0.1%, which means that management is no return to investors. This means that even if investors put money in the bank than to vote for Finisar in exchange for higher returns.

Finisar Doyle conclusion is not supported by the current earnings outlook for the stock now. We are not the financial industry, for their analysis and conclusions can not comment. But from the feeling we live in the optical communications industry, the costs continue to rise should be an indisputable fact, more than Finisar, other optical device manufacturers face the same. Finisar has the leading technology in fact there are new technologies and products to improve profitability, most of their competitors do not have this power.

Market prospects for the optical communication industry, all these years of rapid development FTTH, data center, driving the rapid growth of optical devices and fiber optic cable and other markets. Now China Mobile to host the 90 million core km of fiber optic cable is an example of the bidding market hot. Today, however, Doyle read this article, but people have some concerns. After all, the world macroeconomic situation is also far from clear, the Americans say that the increase does not raise interest rates to observe the performance of the Chinese economy, China's own ability to maintain 7% in the second half of the growth or problems. Optical communications market in Europe has just improved, and now into a refugee crisis. Russian oil prices dragged down the market far less. Development of optical communication market growth depends on the bandwidth consumed by an unstable economic situation is difficult to say to have stable bandwidth consumption growth. Today, we still see the Wall Street Journal said that Verizon is expected to next year's estimated income levels and unchanged from 2015, is one of the reasons behind the rapidly changing needs of consumers.

If even Huawei said his far without success, so for today's optical communications industry, especially optical components industry, vigilant even more indispensable.