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Lumentum (LITE) Q4 Earnings Beat Estimates, Revenues Rise Y/Y

Lumentum LITE delivered non-GAAP earnings of $1.47 per share for fourth-quarter fiscal 2022, which beat the Zacks Consensus Estimate by 8.89% and increased 28% from the earlier fiscal year’s quarterly reading.

Revenues of $422.1 million were up 7.7% from the last fiscal year’s quarterly figure, surpassing the consensus mark by 0.07%. The top line was positively impacted by a solid surge in commercial lasers business. However, progress slowed down due to low growth in the optical communications business.

Quarter in Detail

In the fiscal fourth quarter, Lumentum’s optical communications revenues (87.9% of total revenues) were up 4.4% year over year owing to an increase in telecom and datacom business revenues, which increased 10% year over year to $282.1 million. However, growth was sluggish due to a loss in the industrial & consumer business segment, which fell 10.1% from the year-ago fiscal quarter’s figure.

Commercial lasers revenues of $51.2 million (12.1% of total revenues) also rose 38.8% from the year-ago fiscal quarter’s reading on solid demand for fiber, ultrafast, solid-state and gas lasers in the industry.

Lumentum Holdings Inc. Price, Consensus and EPS Surprise

Lumentum Holdings Inc. Price, Consensus and EPS Surprise
Lumentum Holdings Inc. Price, Consensus and EPS Surprise

Lumentum Holdings Inc. price-consensus-eps-surprise-chart | Lumentum Holdings Inc. Quote

In the fiscal fourth quarter, LITE reported a non-GAAP gross margin of 50.4%, which expanded 270 bps from the year-ago fiscal quarter’s number, primarily driven by higher revenues.

Total operating expenses in the quarter were $91.1 million (21.6% of total revenues), down 150 bps.

Non-GAAP operating margin for the fiscal fourth quarter was 28.8%, which expanded 420 bps from the year-ago fiscal quarter’s level.

Adjusted EBITDA was $142 million, which increased 20.9% from the year-ago fiscal quarter’s tally.

Balance Sheet and Cash Flow

As of Jun 30, 2022, Lumentum reported cash and short-term investments of $2.55 billion compared with $2.56 billion as of Mar 31, 2022.

In the fiscal fourth quarter, Lumentum generated $114.3 million of cash flow from operations compared with $76.6 million in the fiscal third quarter.

Guidance

For the first quarter of fiscal 2023, LITE expects net revenues in the range of $490-$520 million.

Non-GAAP operating margin is expected between 25% and 27%.

Non-GAAP earnings per share are expected to be $1.45-$1.70.

Zacks Rank & Stocks to Consider

Lumentum currently has a Zacks Rank #3 (Hold).

Lumentum’s shares have fallen 15.3% compared with the Zacks Computer and Technology sector’s decline of 20% in the year-to-date period.

Here are some better-ranked stocks from the broader sector:

Intuit INTU carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Intuit’s shares have slumped 24.9% in the year-to-date period compared with the Zacks Computer - Software industry’s decline of 15.3%.

Keysight Technologies KEYS carries a Zacks Rank of 2, currently.

KEY’s shares have dropped 18% in the year-to-date period compared with the Zacks Electronics - Measuring Instruments industry’s decline of 15.3%.

Arco Platform ARCE is presently Zacks #2 Ranked.

ARCE’s shares have plunged 19.6% in the year-to-date period compared with the Zacks Internet - Software industry’s decline of 42.7%.


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