Two notable optical communication equipment companies will report after the bell. Both preannounced second quarter results last month. One had continued good news for investors while the other once again disappointed...
Applied Optoelectronics (AAOI) raised guidance for the fourth consecutive quarter last month. The company raised second quarter non-GAAP EPS to $1.31-1.36 from $1.09-1.19 and raised revenue to $117.3 mln from $106-112 mln.
- "I'm pleased to announce that we expect to deliver another record quarter with our top and bottom-line results expected to exceed our guidance," said Dr. Thompson Lin, Applied Optoelectronics, Inc. founder, president and CEO. "Again this quarter, our results were driven by improvement in our manufacturing costs, capacity expansion and solid execution by our production team. We are pleased with our performance and look forward to sharing the additional details of our second quarter results on our conference call in August."
Last quarter, AOI said it was seeing record demand for 100G products. AOI also said it was the lowest cost option in the market.
The stock has since surged to new all-time highs but still trades at ~18x earnings estimates with a $1.85 billion market cap. Almost 60% of the 18 million share float is sold short.
On the other hand, Acaia Communications (ACIA) lowered second quarter guidance and offered an outlook for the third quarter that was below Wall Street expectations last month. After reporting some strong quarters out of the gate following its IPO last summer, Acacia has now guided-down three quarters in a row. After rising more than 400% from its IPO price, the stock is down ~65% from its all time highs.
- "Our second quarter results were adversely affected by the quality issue identified at one of our three contract manufacturers that we announced on May 31. As we previously announced, we identified a circuit board cleaning process as the likely root cause of the quality issue. This cleaning process was eliminated and manufacturing at the impacted contract manufacturer resumed. Although we began to ramp manufacturing capacity with our contract manufacturers during the quarter, we experienced supply constraints as capacity was used to both build replacement units and to meet new demand from customers for our AC400 and CFP units," said Raj Shanmugaraj, President and Chief Executive Officer of Acacia Communications. "We anticipate completing our remediation efforts with respect to the remaining impacted units during the third quarter of 2017... While we are disappointed with the impact that the quality issue had on second quarter results, looking ahead to the third quarter, we believe we are well positioned to meet customer demand for our products, which we believe continues to be driven by the strength of our product capabilities."
Despite the decline, Acacia still trades at 27x what investors hope are 'trough' 2017 earnings. Acacia also has a $1.75 billion market cap and nearly half of the 19 million share float is sold short.