Lumentum Shares Dip On Weak Q3 Outlook; Tops Q2 Consensus; Margins Shrink Due To Supply Crisis

  • Lumentum Holdings Inc LITE reported second-quarter FY22 revenue of $446.7 million, down 6.7% year-on-year, beating the consensus of $445.5 million.
  • Optical Communications revenue declined 11.5% Y/Y to $397.4 million, and Lasers revenue rose 66% Y/Y to $49.3 million.
  • The non-GAAP gross margin contracted 240 bps to 51%. The non-GAAP operating margin compressed 380 bps to 31.7%.
  • The adjusted EPS of $1.60 beat the consensus of $1.58.
  • Lumentum held $2 billion in cash and equivalents and generated $206.5 million in operating cash flow.
  • Outlook: Lumentum sees Q3 revenue of $375 million - $405 million, below the consensus of $428.7 million.
  • The adjusted EPS outlook of $1.01 - $1.19 trails the consensus of $1.36.
  • "Industry-wide supply shortages have worsened with the recent surge in COVID-19 and are negatively impacting our third quarter revenue guidance by more than $65 million," said CEO Alan Lowe.
  • "We continue to work to alleviate supply constraints, and expect fourth quarter revenue to be up from that of the third quarter and supply shortages to improve by the second half of this calendar year."
  • Price Action: LITE shares traded lower by 12.4% at $88.41 on the last check Thursday.

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