Newport Corp (NEWP)

The company is a leader in the field of t-laser technology and other related scientific products and systems. These products and systems are used in industries as diverse as scientific research, aerospace and security. Based on end markets served, the revenue segments are divided into three main segments namely scientific research, which includes revenue from defense, Microelectronics and Life sciences.

Net sales for the nine-month period ending September 2006 went up by 10% backed by 14% increase in Photonic products and 4% increase in laser products. Scientific research and Microelectronics contributed close to 33% each during the same period and Life science segment 17%. The rest came from other fragmented markets. Of the three, Scientific research saw a decline of 5% while Microelectronics grew by 27% and Life sciences by 16%. The company caters to both domestic and international clients with the former contributing 54% during the same period. The domestic sales increased by 12% compared to a 7% increase in international sales in 2006.

When it comes to competition there are only few pure players in this field, who competes with Newport in almost all the product category and market classifications. Among them Newport is the largest both in terms of market cap and revenue. Innovations in laser and precision photon technology has opened up new application in defense, aerospace and applied physics. Apart from the scientific side these applications are slowly finding their way into consumer markets. These technologies find usage in communication and entertainment sectors, helping create appliances for future generations.

With company’s increased reliance in scientific research and Microelectronic segments, the gains are immense. Also around 46% of revenue is derived from international markets, majority of which are from countries like China, Japan and Taiwan. The demand from these countries is going to rise as a result of upsurge in advanced semiconductor demand, which utilizes company’s technology. These factors will eventually reflect in its stock price, resulting in an upward movement.