Market Overview

Lumentum Shares Plunge After Guidance Cut, Bruising Apple Stock In The Process

Lumentum Shares Plunge After Guidance Cut, Bruising Apple Stock In The Process

Apple Inc. (NASDAQ: AAPL) shares were down more than 4 percent Monday after key iPhone supplier Lumentum Holdings Inc (NASDAQ: LITE), slashed its guidance.

The damage to Lumentum's stock was much worse, with shares hitting a new 52-week low of $37.59 and trading down about 30 percent at the time of publication. 

What Happened

Lumentum, which manufactures 3-D chips that help power the iPhone's facial recognition system, revised its fiscal second quarter outlook due to "a request from one of our largest industrial and consumer customers" — likely a reference to Apple.

Lumentum said it was told to "materially reduce shipments" of laser diodes for 3-D sensing to the unnamed customer.

The manufacturer lowered its fiscal second-quarter revenue outlook from a range of $405-$430 million to a new range of $335-$355 million. The company also lowered its non-GAAP operating margin from a range of 28-30 percent to 23-25 percent and the net income per share range from $1.60-$1.75 to $1.15-$1.34 per share.

Why It's Important

Lumentum's revision could be seen as a sign that Apple cut its orders by as much as 30 percent, Bloomberg quoted Wells Fargo analyst Aaron Rakers as saying in a research report.

Loop Capital Markets analyst James Kisner was also quoted by Bloomberg as saying Lumentum's guidance is "not entirely surprising," as the market for 3-D sensing technologies is likely to be smaller than previously expected.

What's Next

Lumentum's management team will be speaking at upcoming investor conferences, including:

  • The UBS Global Technology Conference on Monday.
  • The Needham Networking, Communications & Security Conference at 9:20 a.m. Tuesday, Nov. 13.

Related Links:

Analyst: Skyworks Could Be The Culprit Behind Apple's iPhone Production Cuts

Intel Is The Semiconductor Sector's Only Candidate For Estimate Raises, Nomura Says In Upgrade

Photo courtesy of Apple. 

Posted-In: 3-D sensing Apple Suppliers Apple Supply ChainAnalyst Color News Guidance Analyst Ratings Media Best of Benzinga


Related Articles (AAPL + LITE)

View Comments and Join the Discussion!

Latest Ratings

TVPTImperial CapitalDowngrades15.8
ACORGoldman SachsDowngrades10.0
BCOVB. Riley FBRUpgrades12.0
CAMPFirst AnalysisDowngrades22.0
View the Latest Analytics Ratings
Don't Miss Out!
Join Our Newsletter
Subscribe to:
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
Your weekly roundup of hot topics in the exciting world of fintech.
Thank You
for registering for Benzinga’s newsletters and alerts.
• The Daily Analysts Ratings email will be received daily between 7am and 10am.
• The Market in 5 Minutes email will be received daily between 7am and 8am.
• The Fintech Focus email will be received every Friday between 2pm and 5pm.

Where's Walmart? Opening of Canadian CBD Market Prompts Speculation About Retail Giant

Upcoming Earnings: Home Depot Takes The Stage As Housing Data Looks Mixed