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01 Nov 2019
CEO hails "increased scale resulting from organic growth, market share gains and the Oclaro acquisition."
Lumentum yesterday reported results for its fiscal first quarter of 2020 ended September 28, 2019. Considering the latest quarter’s figures, CEO Alan Lowe commented, “Revenue increased 11% sequentially and 27% year on year. 3D sensing was the primary driver for sequential growth and contributed significantly to year-on-year growth."Our industrial and consumer product lines which include 3D sensing were up 92% sequentially and 26% relative to the prior year.”
Net revenue for the fiscal first quarter of 2020 was $449.9M, leading to a Non-GAAP net income for the quarter of $111.4M – compared with prior year equivalent quarter figures $354.1M revenue and $86.1M income. Non-GAAP net income for Q4 2019 was $70.4M.
"Our strong first quarter performance highlights our continued progress toward our long-term strategic and financial goals, with a revenue mix richer in newer and more innovative products, increased scale, and acquisition synergies all driving sequential and year on year improvements in gross and operating margins," added Lowe.
"In particular, improvements in telecom and datacom margins helped first quarter non-GAAP gross margin expand significantly year on year to more than 45% for the first time. As we look to our second quarter, we are seeing strengthening demand for key differentiated products in telecom, datacom, and commercial lasers."
Analysts conference
In the associated analysts conference on October 31st, Alan Lowe, Lumentum’s President and CEO, gave a detailed explanation of how he saw the company’s recent business performance, conditions in its various markets, and his expectations.“We have sustainable technology and market leadership positions across the markets we serve. These have been attained through successful investments in R&D over many years and more recently enhanced by M&A.
“Our increased scale resulting from organic growth, share gains and the Oclaro acquisition allows us to invest more in new technologies and products. For example, our current investment in R&D is more than 30% higher than before the Oclaro acquisition despite having reduced the number of combined product lines.”
“Year-on-year growth was driven by winning strong share in a larger market as customers are incorporating 3D sensing in a higher percentage of their product offerings compared to last year. During the first quarter, we saw multiple customers launch new products, incorporating front and world facing 3D sensing capabilities.
“These product introductions demonstrate the increase in appeal of 3D sensing for biometric authentication, computational photography and augmented and virtual reality. We have shipped more than a half a billion 3D sensing lasers to date.
“Related to 3D sensing, since our last call, we have provided additional samples of photonic devices for the automotive market including laser assemblies for high-performance LIDAR applications.”
Forecast
Looking to the second quarter, in this sector, Lowe commented, “Our guidance contemplates 3D sensing declining more than 20% sequentially, which is larger than the seasonal declines we experienced last year due to this year's earlier ramp.”
Lumentum expects the following for the fiscal second quarter 2020:
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