Lumentum's Fiscal Second-Quarter Results Plunge Amid Networking Inventory Correction; Stock Slides
MT NEWSWIRES 1:02 PM ET 2/8/2024
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| LITE | 46.25 | -12.52 (-21.3034%) | | QUOTES AS OF 03:07:09 PM ET 02/08/2024 |
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01:02 PM EST, 02/08/2024 (MT Newswires) -- Lumentum's(LITE) stock tumbled 20% in Thursday trade after the optical and photonic product maker reported sharp declines in fiscal second-quarter results and forecast inventory correction within industrial laser over the next six months.
Revenue plunged to $366.8 million for the three months ended Dec. 30 from $506 million a year ago but topped the average analyst estimate of $363.1 million in a Capital IQ survey. The top-line results included $59.5 million from a partial quarter of recently acquired Cloud Light, Chief Financial Officer Wajid Ali said on a conference call, according to a Capital IQ transcript.
Adjusted earnings per share tumbled to $0.32 from $1.52 year over year but beat the Street's view of $0.30. Non-GAAP gross margin dropped to 32.6% from 44.9% on an annual basis, reflecting product mix and factory underutilization, Ali told analysts.
By segment, revenue in cloud and networking declined about 25% year over year to $286.7 million. The drop reflected broad-based softness across most of Lumentum's(LITE) telecom networking product lines due to "continued inventory correction" at network equipment customers, Chief Executive Alan Lowe said on the call.
Industrial tech revenue tumbled nearly 35% to $80.1 million. Industrial tech faces lower demand over the coming quarters due to typical seasonality in its consumer business, macro softness and elevated inventory levels at a "large laser customer," according to Lowe. Industrial laser inventory is expected to be corrected over the next six months, which should align with the seasonal uptick in its consumer business and lead to the segment's recovery in the second half of the calendar year, he said.
For the fiscal third quarter, Lumentum(LITE) is guiding revenue in the range of $350 million to $380 million and non-GAAP EPS of $0.20 to $0.35. The consensus is for revenue of $380.3 million and normalized EPS of $0.32 in the ongoing quarter.
"Given a mid-calendar year product transition planned by our largest data center customer, we expect revenue from data center transceivers to temporarily dip in the June and September quarters," Lowe said. After that, it is projected to ramp significantly through the end of the year and into calendar year 2025, he told analysts.
While cloud data centers are forecasting double-digit capital expenditure growth in the current calendar year, the company is "navigating challenging market conditions" in other parts of its business, Lowe said. Lumentum(LITE) now expects "customer inventory digestion" to extend through the balance of the current fiscal year, he said.
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