Lumentum predicts $65 million of drag on 3Q22 revenues due to supply chain shortages
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.
For related articles, visit the Optical Technologies Topic Center.
For more information on optical components and suppliers, visit the Lightwave Buyer’s Guide.
To stay abreast of fiber network deployments, subscribe to Lightwave’s Service Providers and Datacom/Data Center newsletters.
Stephen Hardy | Editorial Director and Associate Publisher, Lightwave
Stephen Hardy is editorial director and associate publisher of Lightwave and Broadband Technology Report, part of the Lighting & Technology Group at Endeavor Business Media. Stephen is responsible for establishing and executing editorial strategy across the both brands’ websites, email newsletters, events, and other information products. He has covered the fiber-optics space for more than 20 years, and communications and technology for more than 35 years. During his tenure, Lightwave has received awards from Folio: and the American Society of Business Press Editors (ASBPE) for editorial excellence. Prior to joining Lightwave in 1997, Stephen worked for Telecommunications magazine and the Journal of Electronic Defense.
Stephen has moderated panels at numerous events, including the Optica Executive Forum, ECOC, and SCTE Cable-Tec Expo. He also is program director for the Lightwave Innovation Reviews and the Diamond Technology Reviews.
He has written numerous articles in all aspects of optical communications and fiber-optic networks, including fiber to the home (FTTH), PON, optical components, DWDM, fiber cables, packet optical transport, optical transceivers, lasers, fiber optic testing, and more.
You can connect with Stephen on LinkedIn as well as Twitter.