SAN JOSE, Calif. - Lumentum Holdings Inc . (NASDAQ:LITE), a prominent player in the optical and photonic products market, reported its fiscal third quarter results, which revealed a mixed financial performance and a guidance that fell short of analyst expectations.
The company's stock fell by 4% following the announcement, signaling investor concern over the company's near-term prospects.
For the fiscal third quarter ended March 30, 2024, Lumentum posted adjusted earnings per share (EPS) of $0.29, modestly surpassing the analyst consensus of $0.26. However, the company's revenue of $366.5 million was nearly flat compared to the $364.65 million expected by analysts and represented a 4.4% decrease from the $383.4 million reported in the same quarter last year.
President and CEO Alan Lowe highlighted the company's record data center revenues and its strategic positioning to leverage the growing demand in cloud data centers. Despite this, Lowe acknowledged the impact of slowing telecom spending on the company's revenue, expressing confidence in Lumentum's market position and the anticipated recovery and growth in the telecom sector.
Looking ahead, Lumentum's guidance for the fiscal fourth quarter of 2024 was less optimistic than market expectations. The company forecasts an adjusted EPS range of -$0.05 to $0.10, significantly below the analyst consensus of $0.14. Revenue is projected to be between $290 million and $315 million, also under the consensus estimate of $330.9 million.
The company's weaker-than-expected guidance for the next quarter reflects ongoing challenges in the telecom industry, which has been a drag on revenue as customers work through inventory issues. This outlook has evidently weighed on investor sentiment, as evidenced by the stock's 4% decline.
Lumentum's financial position remains solid, with $870.9 million in total cash, cash equivalents, and short-term investments by the end of the fiscal third quarter. The company also reported the full repayment of its convertible notes due in 2024, amounting to $323.1 million.
As Lumentum navigates the current industry headwinds, Lowe remains confident in the company's long-term strategy, stating, "We are highly confident in our market position and the future recovery and growth in our telecom business."
Investors and analysts will continue to watch Lumentum's performance closely as it adapts to the evolving demands of the telecom and data center markets.
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