Summary
Lumentum Holdings Inc. reported a decrease in net revenue for the three months ended September 30, 2017, down 5.8% year-over-year to $243.2 million. This decline was primarily driven by a 4.8% decrease in the Optical Communications (OpComms) segment, largely due to lower sales of Telecom SuperTransport Blade and modulator products, although 3D sensing products showed an increase. The Commercial Lasers segment also saw a significant drop in revenue, down 11.3%, primarily due to reduced sales of kilowatt fiber laser products. Profitability was impacted by a substantial decrease in gross margin, which fell to 28.2% from 31.7% in the prior year. This was mainly attributed to lower gross margins in the Lasers segment, which experienced a 13.2% decrease, and an increase in unallocated corporate items, particularly inventory write-downs from canceled programs. While research and development expenses slightly decreased, selling, general, and administrative expenses saw an increase. The company ended the quarter with $150.8 million in cash and cash equivalents, a decrease from the prior quarter, but expressed confidence in its ability to meet liquidity and capital spending requirements for the next 12 months.
Financial Highlights
50 data points| Revenue | $243.20M |
| Cost of Revenue | $173.90M |
| Gross Profit | $68.50M |
| R&D Expenses | $36.30M |
| SG&A Expenses | $26.60M |
| Operating Expenses | $65.80M |
| Operating Income | $2.70M |
| Net Income | $7.10M |
| EPS (Basic) | $0.11 |
| EPS (Diluted) | $0.04 |
| Shares Outstanding (Basic) | 61.70M |
| Shares Outstanding (Diluted) | 64.50M |
Key Highlights
- 1Net revenue for the quarter decreased by 5.8% to $243.2 million compared to the same period last year.
- 2Optical Communications (OpComms) revenue declined 4.8% driven by lower sales of certain product lines, though 3D sensing product sales increased.
- 3Commercial Lasers segment revenue dropped 11.3%, attributed to decreased sales of kilowatt fiber laser products.
- 4Gross margin significantly decreased to 28.2% from 31.7% year-over-year, impacted by lower margins in the Lasers segment and increased unallocated corporate charges (inventory write-downs).
- 5Selling, General, and Administrative (SG&A) expenses increased by 6.0% due to higher payroll-related expenses.
- 6Cash and cash equivalents decreased by $122.1 million from the prior quarter, ending at $150.8 million, primarily due to investments and capital expenditures.
- 7The company believes its current liquidity is sufficient for the next 12 months, but acknowledges potential needs for additional financing for growth or strategic initiatives.