Applied Optoelectronics Plunges 20% Following Weak Preliminary Q1 Results

Shares of Applied Optoelectronics Inc AAOI, a provider of fiber-optic networking products, plunged more than 20 percent after the company reported preliminary first quarter results which mostly fell short of prior guidance.

Applied Optoelectronics now expects to lose $0.04 to $0.06 per share on revenue $50 million to $50.5 million. The company previously guided its earnings per share to a range of $0.21 to $0.28 on revenue of $50 million to $54 million.

The company expects to record a net loss of $0.7 million to $1.0 million, below the company's prior estimates of a net income between $3.8 million to $5.0 million. Gross margin is now expected to be in the range of 28.0 percent to 28.5 percent, compared with a prior guidance of 31.0 percent to 32.5 percent.

"We expect first quarter revenue to be within our guided range, representing at least 65% year-over-year growth, however our bottom line results were impacted by higher than expected cost of goods sold and research and development costs. These additional costs were incurred due to lower than anticipated yields on certain longer-reach 40G light engines and redesign activities associated with manufacturing cost reduction efforts," said Dr. Thompson Lin, Applied Optoelectronics, Inc. founder, Chairman and CEO.