NeoPhotonics Corp NPTN, a manufacturer of optoelectronic products, lowered its second-quarter guidance related to "a write-down of certain inventories" as a result of new Department of Commerce restrictions on sales to the Chinese company Huawei.
What Happened
NeoPhotonics reduced its second-quarter sales guidance from a range of $88 million to $93 million to a range of $75 million to $80 million vs. a $90.4-million consensus estimate.
The optoelectronics company lowered its adjusted EPS guidance from a loss of 4-6 cents to a loss of 5-15 cents against a one-penny estimate.
On May 15, the Trump administration added Huawei to a list of companies that U.S. firms can no longer trade with unless they have a license. The "entity list" bans the company from acquiring technology from U.S. firms without government approval.
Why It's Important
"This action creates a material impact on NeoPhotonics and many others in the optical communications market and related industries. We are fully complying with the restrictions and have ceased shipments of products subject to EAR," NeoPhotonics CEO Tim Jenks said in a statement.
The company's objective now is to quickly lower manufacturing and operating expense levels in order to be cash positive at a lower revenue level, the CEO said.
Inphi Corporation IPHI also cut guidance yesterday on the back of Huawei ban.
Price Action
NeoPhotonics shares were down 0.76 percent at $3.94 at the time of publication Thursday.
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