Shares of Oplink Communications, Inc. (Nasdaq:OPLK) sunk to a 52-week low mid-session after the photonic components and intelligent modules provider said after Thursday's close that it expects to record a third-quarter loss and lowered its sales guidance due to softer than expected demand from customers in Europe.

The company also said it expects continued softness in its business in the fourth-quarter as a result of continued weakness in Europe, reduced ROADM sales and lower product sales during the transfer of its OCP manufacturing lines to China.

Shares of Oplink Communications sunk 28%, or $3.31, to a 52-week low of $8.71 at 2:15 p.m. ET on the news. Shares of Oplink Communications have been trading in the range of $10.57 to $18.10 for the past 52 weeks. 

For the three months ending March 31, 2008, the Fremont, Calif.-based company said it expects revenues in the range of $39 million to $40 million, down from the previously issued revenue range of $41 million to $45 million. Six analysts surveyed by Thomson Financial were on average forecasting revenues of $43.36 million.

On account of the expected lower revenues and an expected substantial charge on excess and obsolete inventory, Oplink said it expects to report a loss in the third-quarter. This compares with initial guidance for earnings of $0.12 to $0.16 per share.  The consensus of six analysts surveyed by Thomson Financial was $0.15 per share.

Piper Jaffray downgraded the stock to “sell” from “neutral” this morning, while Needham & Co downgraded the stock to “hold” from “strong buy.” Neither could be reached for comment.

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