Oclaro, Inc. (NASDAQ:OCLR) Surges on New Financials

[[tagnumber 0]][[tagnumber 1]]The shares of Oclaro, Inc. (NASDAQ:OCLR) got a hefty mid–week boost after the provider of optical communication solutions published its fourth–quarter and fiscal year 2015 financial results, fairly beating analysts’ revenue estimates. The stock price rallied to $2.70 on Thursday, allowing for a cumulative two–day appreciation of 27 per cent. Friday’s session cooled OCLR off a bit and the company’s shares closed the week at $2.64 per share, which is still its highest market value for the last six weeks or so. Does the company seem poised for a steady run upwards at this stage?[[tagnumber 2]] [[tagnumber 0]]As it is, even though OCLR raked in more revenue in Q4 than in the year–ago quarter, this improvement had little or no positive effect on the company’s net quarterly loss. The latter went up a bit to $11.4 million, bringing the total net loss for the fiscal year 2015 to $54.2 million. By contrast, Oclaro closed the FY2014 with a net income of $17.8 million.[[tagnumber 2]] [[tagnumber 0]][[tagnumber 6]]In spite of the bulky net loss for the most recent fiscal year, CEO Greg Dougherty has remained highly optimistic about the further development of the company’s 100G product lines over the next quarterly periods, which could have a positive impact on OCLR’s overall financial condition.[[tagnumber 2]] [[tagnumber 0]]Whether this will happen or not has yet to be seen. What is evident from the figures, however, is that OCLR’s annual revenues have been on the decline for each of the last three years on record and the FY2015 top line of some $341.2 million is actually 13% and 16% worse than the numbers incurred in FY2014 and FY2013, respectively. Yet, analysts have more or less remained confident in the stock by giving it a Buy/Hold recommendation. Considering that they expect a net loss of $0.41 per share for the new 2016 fiscal year, it is safe to assume that their optimism either relates to the immediate future, or to a further time horizon.[[tagnumber 2]] [[tagnumber 0]]So far, Oclaro has failed to outperform the industry average when it comes to earnings and, based on the projected estimates, seems unlikely to do so for the next few quarters at least. This partially explains the heavy short interest in OCLR. As of Jul. 15, there were more than 14 million short sold shares against a daily average volume of less than 1 million. Of course, shorters must have closed out some (if not all) of their positions after OCLR went bullish on Aug. 5. Nevertheless, until we see updated short interest data, the prospect of more buying pressure in the future remains as real as it gets.[[tagnumber 2]] [[tagnumber 0]]Last but not least, insiders seem to have an abiding interest in OCLR as they have acquired a net 0.7 million shares over the last twelve months, thus giving clear signals as to what their sentiment to the stock is.[[tagnumber 2]]