- Lumentum Holdings Inc LITE agreed to acquire NeoPhotonics Corp NPTN for $16 per share in cash, implying a total equity value of $918 million.
- The purchase price implies a 39% premium to NeoPhotonics' November 3 closing price.
- The addition of NeoPhotonics expands Lumentum's opportunity in some of the fastest-growing areas of over $10 billion market for optical components used in cloud and telecom network infrastructure.
- Lumentum reported first-quarter FY22 revenue of $448.4 million, down 0.9% year-on-year, beating the consensus of $440.8 million.
- Optical Communications revenue declined 5.3% Y/Y to $406 million, and Lasers revenue rose 77.4% Y/Y to $42.4 million.
- The non-GAAP gross margin expanded 300 bps to 55%. The non-GAAP operating margin expanded 170 bps to 35.4%.
- The adjusted EPS of $1.79 beat the consensus of $1.55.
- Lumentum held $1.88 billion in cash and equivalents.
- Outlook: Lumentum sees Q2 revenue of $435 million - $455 million versus the consensus of $441.9 million.
- The adjusted EPS of $1.47 - $1.64 stacks against the consensus of $1.53.
- "Our Industrial and Consumer product lines and our Commercial Lasers segment revenues were ahead of expectations which more than offset the impact of semiconductor shortages in our Telecom and Datacom product lines," CEO Alan Lowe said.
- Price Action: LITE shares traded higher by 2.71% at $89.16, while NPTN was up 38.4% at $15.94 on the last check Thursday.
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