Doanh thu quý của Lumentum giảm 24,2% so với quý trước do phải xử lý hàng tồn kho của khách hàng
News: Optoelectronics
26 May 2023
For its fiscal third-quarter 2023 (ended 1 April), Lumentum Holdings Inc of San Jose, CA, USA (which designs and makes optical and photonic products for optical networks and lasers for industrial and consumer markets) has reported revenue of $383.4m, down 24.2% on $506m last quarter and 3% on $395.4m a year ago, and below the initial $430–460m guidance.
“Customers who had built up large inventories due to supply concerns are bringing down inventories as supply risks and constraints are easing,” says president & CEO Alan Lowe. “We are currently under-shipping end-market demand across our business,” he believes.
The Commercial Lasers segment contributed $48.3m (12.6% of total revenue), down 15.6% on $57.2m last quarter and 5.7% on $51.2m a year ago, due to lower shipments of fiber lasers and solid-state lasers. However, there was over 70% year-on-year revenue growth for ultrafast lasers, driven by new applications (particularly in solar cell manufacturing). “We expect that, as these new laser applications grow, we will gain further share in ultrafast lasers,” says Lowe.
The Optical Communications segment contributed $335.1m (87.4% of total revenue), down 25.3% on $448.8m last quarter and 2.6% on $344.2m a year ago, due mainly to the inventory dynamics. Specifically:
- Telecom & Datacom revenue was up 20% year-on-year but down 24% sequentially, with declines across most major product lines due to customer inventory digestion. The ongoing shortages in supply of IC components from third parties did not significantly limit revenue, as IC purchases at third-party brokers declined to nominal levels.
Revenue from reconfigurable optical add/drop multiplexers (ROADMs) was down sequentially due to customers digesting the inventory build-up, but up year-on-year, driven by broader adoption of next-generation ROADMs by market-leading customers along with improved IC supply (after the supply of FPGAs, for example, had been constrained during much of 2022).
“We have a growing set of cable, MSO and wireless network customers that are turning to our tunable access modules to expand data bandwidth in metro access, fiber deep and wireless 5G fronthaul application,” says Lowe. Revenue from these products grew 17% sequentially and doubled year-on-year to a new quarterly record.
- Industrial & Consumer revenue was down both sequentially and year-on-year due to smartphone seasonality and end-market demand. However, beyond the smartphone market, Lumentum continues to ramp new automotive and industrial sensing applications for an expanding set of customers. Automotive-related applications comprised about $3m, “which, at the chip level, is significant”, says Chris Coldren, senior VP & chief strategy and corporate development officer. This reflects a significant contributions from early adopters of automotive light detection and ranging (LiDAR) in China.
On a non-GAAP basis, gross margin has fallen further, from 49.5% a year ago and 44.9% last quarter to 40.8%, due mainly to the lower revenue and the product mix.
Specifically, Optical communications segment gross margin of 40.8% was down both sequentially and year-on-year, due mainly to lower revenue and the impact of product margins from NeoPhotonics Corp, a vertically integrated designer and manufacturer of silicon photonics and hybrid photonic integrated circuit (PIC)-based lasers, modules and subsystems for high-speed communications (acquired in August 2022).
Commercial Lasers segment gross margin of 40.4% was down both sequentially and year-on-year, due primarily to an inventory reserve resulting from lower volumes and a fiber-laser product transition (although product margins are expected to recover after shipments are fully shifted to the new laser platform and manufacturing volumes return).
“As we navigate current demand, we are prioritizing expense controls, accelerated attainment of acquisition synergies, and cash generation, while we continue to deliver on our new product and technology roadmaps and customer satisfaction,” says Lowe.
Operating expenses totaled $104.9m (27.4% of revenue), cut by $5.4m from $110.3m last quarter, as seasonal increases were more than offset by tight expense controls and synergies. Specifically, selling, general & administrative (SG&A) expenses were cut from $45.9m to $42.8m, and R&D expenses from $64.4m to $62.1m.
Operating income has more than halved from $104.9m (operating margin of 26.5% of revenue) a year ago and $116.7m (23.1% margin) last quarter to $51.4m (13.4% margin).
Net income was $51.8m ($0.75 per diluted share), down from $104.1m ($1.52 per diluted share) last quarter and $88.9m ($1.19 per diluted share) a year ago.
During the quarter, total cash, cash equivalents and short-term investments fell by $13.2m, from $1680.4m to $1667.2m.
For fiscal fourth-quarter 2023, Lumentum expects revenue to fall further to $350–380m, as Commercial Laser revenue will be roughly flat quarter-to-quarter, while modest growth in the Telecom & Datacom sector will be offset by a decline in Industrial & Consumer. Further declines are expected in operating margin to 8.5–11.5% and in diluted earnings per share to $0.45–0.65.
“While there’s a mixed outlook among our markets and product line, current visibility indicates that Telecom & Datacom demand will start to recover from this customer inventory correction late in the second half of the calendar 2023,” says Lowe.
“Our new 25G tunable access module will be a key enabler for customers upgrading legacy fiber nodes in metro access networks leveraging next-generation distributed access architecture. However, as we transition customers from 10G to 25G in the coming quarters, we may see some revenue lumpiness,” cautions Lowe. “Our advanced ROADMs are key enablers of our customers’ next-generation network architectures that are just starting to be deployed, giving us confidence in continued market share growth and future demand,” he adds.
“We expect Commercial Lasers demand to be softer over the next several quarters due to the macro factors impacting end-market and customer inventory digestion,” notes Lowe.
“To accelerate the integration of NeoPhotonics products into our global manufacturing footprint and attain synergies without impacting customer deliveries, we plan to carry elevated inventories for a period of time. However, we expect inventories to decline by approximately $40m exiting calendar year 2023 as we continue to focus on cash generation. That is going to have an impact on overall gross margins, at least in the back half of the calendar year,” says chief financial officer Wajid Ali. “Also, we expect a moderation in CapEx spending over the next few quarters.”
“Although we expect the overall demand environment is likely to be challenging in the near term, I’m very confident about Lumentum’s mid- to long-term prospects, given that fundamental end-market and technology trends driving our growth expectations are unchanged,” says Lowe.
“The adoption of coherent pluggable modules by network operators is another significant long-term opportunity for us,” says Lowe. “We are highly vertically integrated across the photonics and electronic components that enable high-speed pluggable form factors.
At OFC or 800G ZR product demo was very well received by our customers. Cloud data centers are being designed to support artificial intelligence and machine learning applications, which bodes well for us as we extend our technology leadership to an even broader array of products that enable higher capacity and lower power consumption and latency, as we highlighted at OFC. We are on track with our 200 gig per lane EMLs for 800 gig and 1.6 terabit per second applications and expect to enter production in the second half of calendar 2023 and ramp throughout calendar 2024,” he adds.
“Our high-speed VCSELs are starting to be deployed for short-reach connections within data centers, where optical communications are replacing copper connections due to data speed requirements,” Lowe continues. “Also, as we highlighted at OFC, Lumentum is uniquely positioned to develop new photonics solutions, including high-power laser array engines in coordination with leaders in the high-performance computing market. Given the fast pace of innovation and the increasing demands placed on photonics technologies, we expect that the photonics market for AI will rapidly grow, reaching the size of the existing Ethernet photonics market within the next five years.”
“We expect our fiscal year 2024 3D sensing revenue will be lower than that of fiscal 2023 due to our expectations around 3D sensing end-market demand, pricing and the possibility of an additional competitor on a certain socket opportunity in fiscal 2024,” says Lowe. However, regarding automotive applications: “Recent engagements with a global set of tier-1 customers gives us confidence in new LiDAR revenue opportunities over the coming years, as well as our confidence in our ability to significantly grow our revenue in this market,” he concludes.
Lumentum reduces March-quarter revenue guidance from $430-460m to $380-384m
Lumentum’s quarterly revenue up 13.3% year-on-year to $506m
Lumentum’s quarterly revenue falls 5.7% year-on-year to $395.4m
