Lumentum Holdings (NASDAQ: LITE) reported Q4 EPS of $0.39, $0.05 better than the analyst estimate of $0.34. Revenue for the quarter came in at $222.7 million versus the consensus estimate of $229.29 million.

Business Outlook

For the fiscal first quarter 2018, the Company expects net revenue to be in the range of $245 million to $265 million, non-GAAP operating margin to be 13.0% to 15.0%, and non-GAAP diluted earnings per share to be $0.50 to $0.60 per share, based on approximately 64.2 million shares outstanding on a fully diluted basis.

We have not provided reconciliations from GAAP to non-GAAP measures for our outlook. A large portion of non-GAAP adjustments, such as derivative liability adjustments, restructuring, stock-based compensation, litigation, and other costs and contingencies unrelated to current and future operations are by their nature highly volatile and we have low visibility as to the range that may be incurred in the future. For example, the unrealized loss on the derivative liabilities for Convertible Senior Notes and Series A Preferred Stock in our fiscal fourth quarter of 2017 was a loss of $29.7 million, as compared to a loss of $56.6 million in the fiscal third quarter of 2017. On June 29, 2017, we met the requirements to account for the conversion option of the Convertible Senior Notes as equity and the conversion option will no longer be marked to market. The unrealized loss on the derivative liability for the conversion option of the Convertible Senior Notes accounted for $24.2 million and $38.6 million of the total unrealized loss on the derivative liabilities in the fiscal fourth and third quarters of 2017, respectively. The Series A Preferred Stock derivative liability is revalued based on the fair market value of our common stock on the last day of each fiscal quarter, which is difficult to predict and subject to change.

GUIDANCE:

Lumentum Holdings sees Q1 2018 EPS of $0.50-$0.60, versus the consensus of $0.55. Lumentum Holdings sees Q1 2018 revenue of $245-265 million, versus the consensus of $270.16 million.

For earnings history and earnings-related data on Lumentum Holdings (LITE) click here.