Applied Optoelectronics Investors Be Warned: Q3 Will Be Weaker Than Expected

Applied Optoelectronics Inc AAOI offered a warning related to its upcoming third-quarter results Thursday afternoon.

The company's Founder and CEO, Thompson Lin attributed the weaker-than-expected performance to "lower than expected sales to one of our large datacenter customers."

Applied Optoelectronics reduced its third-quarter guidance from a prior $107 million-$115 million to a new range of $88 million-$89 million. Wall Street analysts had been expecting the company's third-quarter sales to come in around $111.6 million.

Earnings per share are expected to come in between $1.04 and $1.09, well below the previous guidance figures in the range of $1.30-$1.43. The consensus estimate showed analysts were looking for Applied Optoelectronics to report earnings of about $1.31 per share.

"Despite this shortfall, we maintained a strong gross margin profile in the quarter, and continued to experience solid demand with our other top datacenter customers," Lin said.

"Although we are disappointed with these preliminary results, we continue to feel good about our leadership position in advanced optics and remain optimistic based on the customer traction we are seeing with our 100G products, especially our 100G CWDM transceivers," according to Lin.

Shares of Applied Optoelectronics were halted ahead of the guidance news. Upon resumption at 4:35 p.m. EDT, shares plunged more than 20 percent to trade around the $47 level. The stock closed Thursday's regular session at $58.84.

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