Oplink Communications, Inc. (OPLK) recently announced that its Board has approved a new share repurchase program authorizing the repurchase of up to $40 million of common stock. Oplink has almost completed its previously announced stock repurchase program of $20 million. In 2009, Oplink repurchased 488,263 shares at an average price of $7.09.
The share repurchase will be funded from available working capital. As of March 31, 2010, Oplink had cash and equivalents of $169.8 million.
The repurchase program may be suspended from time to time or discontinued. There is no fixed termination date for the repurchase program.
The company continues to make good use of its strong cash balance. During the fiscal third quarter, which ended March 31, 2010, Oplink closed the acquisition of Emit Technology Co., Ltd. for $6.2 million.
Based in Taiwan, Emit is a fiber optic components manufacturer. The primary business for the company includes connectivity solutions, optical connectors, jumper cables, integrators, manufacturers and carriers. Emit primarily sells to the enterprise and access market.
Meanwhile, Oplink reported better-than-expected results for the fiscal third quarter. Net income was $4.8 million or 22 cents per share compared with a net income of $5.7 million or 26 cents in the second quarter of fiscal 2010. Including stock-based compensation expense, net income was 16 cents, beating the Zacks Consensus Estimate of 14 cents.
Management stated that the company continues to invest in expanding capacity and improving lead times to meet a stronger demand environment.
However, production ramp-up remains challenging due to labor and materials shortage. The company expects to see improvement in the coming quarters.
California-based Oplink provides design, integration and optical manufacturing solutions for optical networking components and subsystems.
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