Why Lumentum Shares Are Trading Higher Today

Lumentum Holdings Inc LITE reported third-quarter FY22 revenue of $395.4 million, down 5.7% year-on-year, in line with the consensus.
Optical Communications revenue declined 11.3% Y/Y to $344.2 million, and Lasers revenue rose 62% Y/Y to $51.2 million.
Margins: The non-GAAP gross margin contracted 40 bps to 49.5%. The non-GAAP operating margin compressed 140 bps to 26.5%.
Adjusted EPS of $1.19 beat the consensus of $1.12.
Lumentum held $2.6 billion in cash and equivalents and generated $76.6 million in operating cash flow.
CEO Alan Lowe said, "Demand for our products continues to accelerate, and we now expect demand to outpace component supplies by more than $100 million in the fourth quarter. Our fourth-quarter revenue is expected to increase from the third quarter, primarily driven by Telecom product shipments."
Lowe added, "I am highly optimistic about our outlook and believe market inflections beneficial to Lumentum in our addressable markets will drive double-digit revenue growth in fiscal 2023 and beyond."
Outlook: Lumentum sees Q4 revenue of $405 million - $430 million, versus the consensus of $408.2 million.
Lumentum sees an adjusted EPS of $1.25 - $1.40, above the consensus of $1.22.
Price Action: LITE shares traded higher by 8.72% at $89.30 in the premarket on the last check Wednesday.

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