Lumentum beats estimates on AI demand, guides above consensus

Investing.com -- Lumentum Holdings Inc (NASDAQ: LITE) reported fiscal fourth quarter adjusted earnings per share of $3.23, beating the analyst estimate of $2.95 by $0.28. Revenue reached $1.01 billion, surpassing the consensus estimate of $984.57 million and marking a 109% increase from $480.7 million in the same quarter last year.

The company issued first quarter fiscal 2027 revenue guidance of $1.225 billion to $1.275 billion, with a midpoint of $1.25 billion exceeding the analyst consensus of $1.16 billion. Adjusted EPS guidance of $4.05 to $4.35, with a midpoint of $4.20, also topped the consensus estimate of $3.63. The company attributed the strong results to AI-driven demand for optical connectivity in data centers.

The stock traded nearly flat in after-hours trading Tuesday, with the beat already priced in following a 43% rise over the past six months.

"As AI compute workloads increase in both speed and bandwidth, data center architects are turning to optical links as a primary means of connectivity," said President and CEO Michael Hurlston. "Looking ahead, our trajectory continues to accelerate as AI demand drives our Q1 revenue guidance midpoint to $1.25 billion, reaching our target model more than a quarter ahead of schedule."

For the fiscal fourth quarter, adjusted gross margin was 50.4%, up from 37.8% in the prior year period, while adjusted operating margin reached 36.6%, compared to 15.0% a year earlier. Components revenue totaled $649.4 million, up 103% YoY, while systems revenue was $356.9 million, up 123% YoY.

The company held $2.7 billion in cash, cash equivalents, and short-term investments at quarter end. The first quarter fiscal 2027 guidance calls for adjusted operating margin of 39.5% to 40.5%.

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