Lumentum reduces June-quarter financial guidance after USA adds Huawei to Entity List

Optical and photonic optical component and subsystem maker Lumentum Holdings Inc of Milpitas, CA, USA says it intends to fully comply with the recent US Department of Commerce’s imposed license requirements for the export, re-export and/or in-country transfer of all items subject to US export control regulations to Huawei Technologies Co Ltd of Shenzhen, China and designated affiliates of Huawei. This follows the Department of Commerce adding Huawei to its ‘Entity List’. Lumentum has consequently discontinued all shipments to Huawei effective as of the date that the licensing requirements went into effect and says that it cannot predict when it will be able to resume shipments.

Sales to Huawei represented 11% of total revenue for full-year fiscal 2018 (ended 30 June 2018), about 18% of revenue for fiscal third-quarter 2019 (ended 30 March), and about 15% of revenue for fiscal 2019 year-to-date.

The firm says that financial guidance ranges it provided on 7 May for its fiscal fourth-quarter 2019 (ending 29 June) did not contemplate this Department of Commerce order, the discontinuation of sales to Huawei or the time required to repurpose manufacturing capacity to other customers. Accordingly, it has reduced its expectations for net revenue from $405-425m to $375-390m, for non-GAAP operating margin from 18-20% to 15.5-17%, and for non-GAAP diluted net income per share from $0.85-1.00 to $0.65-0.77.

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Tags: Optical communications

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