Lumentum Holdings (LITE) Cuts Q2 Guidance
Lumentum Holdings Inc. (Nasdaq: LITE) today announced updated business outlook for its fiscal second quarter 2019 based on a recent customer development.
"We recently received a request from one of our largest Industrial and Consumer customers for laser diodes for 3D sensing to materially reduce shipments to them during our fiscal second quarter for previously placed orders that were originally scheduled for delivery during the quarter," said Alan Lowe, President and CEO. "With our proven ability to deliver high volumes, years of experience, hundreds of millions of devices in the field, and new product and customer funnel, we remain confident in our leadership position in the nascent market for laser diodes for 3D sensing."
Revised Net revenue, non-GAAP operating margin, and non-GAAP diluted earnings per share expectations along with the prior guidance range provided in the Company's fiscal first quarter earnings release and earnings conference call on November 1, 2018 are provided in the table below.
Updated and prior business outlook for fiscal second quarter 2019: | ||
Updated Range | Prior Range | |
Net revenue | $335 million to $355 million | $405 million to $430 million |
Non-GAAP operating margin | 23.0% to 25.0% | 28.0% to 30.0% |
Non-GAAP diluted net income per share | $1.15 to $1.34 | $1.60 to $1.75 |
Note: Net income per share is based on approximately 65.9 million shares outstanding on a fully diluted basis | ||
(Street sees Q2 EPS of $1.67 on revenue of $420.4 million)
Our projection of 65.9 million shares outstanding does not include the potentially dilutive effect of the convertible notes, as we have the ability and intent to settle the face value in cash; and therefore, we use the treasury stock method for calculating the dilutive impact of the 2024 Notes. The 2024 Notes will have an impact on our diluted earnings per share when the average price of our common stock exceeds the conversion price of $60.62. Our guidance does not include results from Oclaro or shares issued in connection with the closing of our acquisition of Oclaro as we are unable to predict the timing of the closing.
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 charges, stock-based compensation, litigation, acquisition-related costs, non-cash income tax expense and credits, 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, in the fiscal second quarter of 2018, we had a credit of $207.0 million primarily related to a release of a U.S. valuation allowance, which was offset by a write-down of deferred tax assets in the amount of $83.0 million due to the lower corporate tax rate enacted under the 2017 "Tax Cuts and Jobs Act" reform.
November Investor Conferences
As highlighted on our fiscal first quarter earnings conference call held on November 1, 2018, Lumentum regularly attends investor relations events and these events are listed on our website. During the month of November Alan Lowe, President and CEO, and Chris Coldren, Interim CFO, will present at two investor conferences:
- The UBS Global Technology Conference on Monday November 12th at 12:00 pm Pacific Time in San Francisco; and
- The Needham Networking, Communications & Security Conference on Tuesday November 13th at 9:20 am Eastern Time in New York City.
Both presentations will be available live via audio webcast, as well as archived replay, on Lumentum's Investor Relations website at http://investor.lumentum.com under the Events and Presentations section.