Exhibit 99.1

Avanex Corporation Announces Fiscal 2008 Second

Quarter Financial Results

FREMONT, Calif., Jan. 31, 2008 — Avanex Corporation (NASDAQ: AVNX), a leader in telecommunication components that enable next-generation optical networks, today reported its fiscal 2008 second quarter financial results for the quarter ended Dec. 31, 2008.

Net revenue in the second quarter of fiscal year 2008 was $52.0 million, a decrease of 5% from $54.7 million in the first quarter of fiscal year 2008, and a decrease of 7% from $55.6 million in the same period last year.

Gross margin in the second quarter of fiscal year 2008 was 31%, an increase of 3 percentage points from 28% in the first quarter of fiscal year 2008, and an increase of 12 percentage points from 19% in the same period last year.

Net income in the second quarter of fiscal year 2008 was $86,000, or breakeven per diluted share, compared with net income of $45,000, or breakeven per diluted share in the first quarter of fiscal year 2008. This compares to a net loss of $8.6 million, or a net loss of $0.04 per diluted share, in the same period last year.

Non-GAAP net income in the second quarter of fiscal 2008 was $2.4 million, or a net profit of $0.01 per diluted share, compared with a non-GAAP net income of $2.1 or a net profit of $0.01 per diluted share for the first quarter of fiscal year 2008. This compares to a non-GAAP net loss of $3.5 million, or a net loss of $0.02 per diluted share, for the same period last year.*

“During the second quarter we demonstrated strength in our core business, achieved solid gross margins and generated over $6 million in cash from operations,” said Jo Major, chairman, president and chief executive officer of Avanex. “With our healthy operating structure, we are well positioned for future growth from our new products as we take advantage of growing bandwidth demand,” said Major.

Q3 FY 2008 Outlook

The company expects revenue to be between $46.0 million and $50.0 million, and gross margin to be approximately 25 percent in the third quarter of fiscal 2008, ending March 31, 2008.

Conference Call

Avanex will host a conference call to discuss its fiscal year 2008 second quarter results at 1:30 p.m. Pacific Time today. Investors are invited to listen to a live broadcast of the conference call via webcast, which can be accessed by visiting Avanex’s Investor Relations website at http://investor.avanex.com/events.cfm. Investors can also listen to the conference call by dialing 706-634-8772 and entering access ID number 31835231.

An archived audio webcast of the conference call will be available on the company’s website at http://investor.avanex.com/events.cfm. A telephone replay of the conference call will be available for one week and can be accessed by dialing 706-645-9291 and entering access ID number 31835231.

About Avanex

Avanex Corporation meets the needs of fiber optic communications networks for greater capacity, longer distance transmissions, improved connectivity, higher speeds and lower costs. Our solutions enable optical wavelength multiplexing, dispersion compensation, switching and routing, transmission, and amplification, and include network-managed subsystems. Avanex Corporation, incorporated in 1997, is headquartered in Fremont, California, and maintains facilities in New York, Florida, China, France, Italy, and Thailand. To learn more about Avanex Corporation, visit our web site at: www.avanex.com.

Forward-looking Statements

This press release contains forward-looking statements including statements regarding expected third quarter of fiscal 2008 outlook and future operating results, market demand and growth trends for our products and our strategies. Actual results could differ materially from those projected in or contemplated by the forward-looking statements. Factors that could cause actual results to differ include general economic conditions, the pace of spending in the telecommunications industry and in particular the optical networks industry, market demand and price of our products, the company’s ability to sufficiently anticipate market needs and develop products and enhancements that achieve market acceptance, problems related to realizing the benefits of the divestiture in France, the company’s ability to effect its restructuring goals, unanticipated costs and expenses or the inability to identify expenses which can be eliminated, any slowdown or deferral of orders for products or the application of accounting or tax principles in an unanticipated manner.

Finally, please refer to the risk factors contained in the company’s SEC filings including the company’s Annual Report on Form 10-K filed with the SEC on Sept. 7, 2007, Quarterly Report on Form 10-Q filed with the SEC on Nov. 2, 2007 and subsequent filings with the SEC.

Avanex assumes no obligation and does not intend to update any forward-looking statements, whether as a result of new information, future events or otherwise.

Contact Information:

Gloria Lee

Brooke Deterline

415-775-1788

investorhelp@streetsmartir.com

Avanex Corporation

CONSOLIDATED BALANCE SHEET

In thousands

(Unaudited)

Avanex Corporation

CONSOLIDATED STATEMENTS OF OPERATIONS - GAAP

In thousands, except for per share data

(Unaudited)

Avanex Corporation

RECONCILIATION OF GAAP NET INCOME (LOSS) TO NON-GAAP NET INCOME (LOSS)

In thousands, except for per share data

(Unaudited)