Management at Lumentum Holdings Inc. revealed during an analyst conference call to discuss the results of its fiscal second quarter ended January 1, 2022, the third quarter will see supply chain issues take a $65 million bite out of revenues. This is after the second quarter saw “a $50 million gap between the supply of material and customer demand,” according Lumentum President and CEO Alan Lowe.
"Second quarter demand was strong across all major product lines, and our results were above the midpoint of our guidance on all metrics," said Lowe via a press release that announced 2Q22 performance. "Industry-wide supply shortages have worsened with the recent surge in COVID-19 and are negatively impacting our third quarter revenue guidance by more than $65 million. These shortages come at a time when customer demand is accelerating for our differentiated communications products, which are essential to multi-year expansions in next-generation optical network capacity that are just beginning to be deployed. We continue to work to alleviate supply constraints and expect fourth quarter revenue to be up from that of the third quarter and supply shortages to improve by the second half of this calendar year."
During the analyst call, Lowe said Lumentum had seen an easing of supply chain constraints during the fiscal second quarter. But that momentum reversed strongly in the latter stages of the quarter as COVID cases ramped worldwide. The COVID-induced constraints are expected to continue into the current quarter before again improving in the fiscal fourth quarter.
Lowe said that semiconductors across the complexity spectrum were the chief points of pain. “We continue to work to alleviate supply constraints and expect fourth quarter revenue to be up from that of the third quarter,” Lowe said, sounding a hopeful note during the call. “Furthermore, we expect supply shortages to improve by the second half of this calendar year. Looking beyond these near-term supply challenges, I’m highly optimistic about our outlook and believe market inflections beneficial to us in our addressable markets will drive double-digit revenue growth in fiscal 2023 and beyond, not including the pending acquisition of NeoPhotonics.”
But the fiscal third quarter must be endured first. Lowe and his senior management colleagues delivered 3Q22 net revenue guidance in the range of $375 million to $405 million, below the $446.7 million obtained in the just completed quarter. Non-GAAP operating margin for the current quarter was set at 24.0% to 26.0% versus the 51.0% just achieve. Management forecasted non-GAAP diluted earnings per share of $1.01 to $1.19 after seeing non-GAAP diluted net income per share of $1.60 in 3Q22.
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