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Lumentum Misses Revenue Forecast, Apple Supplier Issues Soft Guidance

CFO Wajid Ali said fourth quarter sales guidance "consistent with our historical seasonality" despite "short-term headwinds in our industry".

Lumentum Holdings  (LITE) - Get Lumentum Holdings Inc. Report posted weaker-than-expected third quarter revenues Wednesday as the Apple  (AAPL) - Get Apple Inc. Report supplier deferred some sales linked to 5G deployment delays in China. 

Lumentum, which supplies laser components for Apple iPhone's facial recognition system, said earnings for the three months ending in March, the group's fiscal third quarter, rose 11.1% from last year to match Wall Street forecasts at $1.40 per share. Group revenues, however, rose 4.1% on a reported basis to $419.5 million, a figure that fell shy of Street forecasts owing to a $14.8 million deferment.

Looking into the final three months of the group's fiscal year, Lumentum said it sees revenues in the range of $360 million to $400 million, and non-GAAP earnings in the range of 92 cents to $1.14 per share.

"The strong year on year margin improvements in our third quarter results highlight a product portfolio increasingly rich in new and differentiated products that are aligned with multi-year favorable market trends and the impact of continuous improvement in our operations," said CEO Alan Lowe. "Out of an abundance of caution, we deferred $14.8 million of revenue due to delays in 5G deployments in China, which decreased our reported revenue accordingly."

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"Despite the lower revenue, due to the strength of our financial model we achieved approximately 50% non-GAAP gross margin, and strong non-GAAP operating margin and EPS, both of which were within our guidance ranges," he added. "Between our product and technology portfolio, our design-wins with market leading customers, and the positive changes in our business model and the industry over the past several years, I believe the future continues to be very bright at Lumentum."  

Lumentum shares were marked 13.5% lower in early trading Wednesday to change hands at $70.95 each, a move that would extend the stock's year-to-date decline to around 25.2%.

Apple shares were marked 1.26% lower at $124.32 each, extending their 2021 slump to 6.3%.