Why Lumentum Holdings Stock Got Trounced on Tuesday

Lowered spending by many telecom sector clients meant declines in key fundamentals for the company.

Market players weren’t exactly dialed in to telecom equipment specialist Lumentum Holdings (LITE -6.14%) on Tuesday. The company’s share price dived by more than 6% in reaction to its latest earnings release. By contrast, the S&P 500 index ended the day marginally in positive territory (at 0.1%).

Double beat on the top and bottom lines…

For its fiscal third quarter, Lumentum earned $366.5 million in net revenue, which was 4% below the same period of fiscal 2023. Non-GAAP (adjusted) net income suffered a steeper fall, tumbling to $19.6 million ($0.29 per share) from the year-ago profit of $51.8 million.

On average, analysts tracking Lumentum stock were anticipating $364.7 million on the top line and $0.26 for adjusted, per-share net income.

During the quarter, Lumentum struggled with lower spending by the telecom sector that it depends upon. This dynamic should persist over the next few quarters, the company added.

…but discouraging guidance for both

Lumentum management proffered guidance for the entirety of the company’s current (fourth) quarter. Net revenue is expected to land at $290 million to $315 million, which would be well under the nearly $371 million in the fourth quarter of fiscal 2023. It also doesn’t reach the consensus analyst estimate of almost $331 million.

The bottom line range is anywhere from an adjusted loss of $0.05 to a profit of $0.10 per share. Again, this compares unfavorably to the prognosticator consensus, which is a net profit of $0.14.

On a brighter note, Lumentum quoted CEO Alan Lowe as saying that “We are making significant strides in developing new products and customer programs, and expanding production capacity to capitalize on exciting opportunities that we expect will meaningfully increase calendar 2025 revenue and beyond.”

Source link

About The Author

Scroll to Top