Applied Optoelectronics (AAOI) is surging premarket after the company preannounced first quarter results well above guidance.
AAOI is a leading developer and manufacturer of advanced optical products, including components, modules and equipment. AOI's products are the building blocks for broadband fiber access networks around the world, where they are used in the internet datacenter, CATV broadband, fiber-to-the-home and telecom markets. AOI supplies optical networking lasers, components and equipment to tier-1 customers in all four of these markets.
Last night, the company reported first quarter revenue of $96.2 million (up 91% year-over-year) versus prior guidance of $87-91 million. Adjusted gross margin came in at 42.9%, above 38-40% guidance. As a result, the company raised first quarter non-GAAP EPS to $1.00-1.02 from $0.80-0.88.
"Our results were driven by continued robust demand for our market-leading datacenter products and solid execution. We are pleased with our momentum and look forward to sharing the additional details of our first quarter performance on our conference call in May."
This marks the fourth consecutive quarter that the company blew away expectations, reporting well above its guidance range.
The company preannounced upside fourth quarter results in January and then guided Q1 well above consensus in February.
The stock was up some 160% year-to-date when it hit $60/share in late March but the momentum quickly reversed and the stock broke below its gap up from the strong Q4 report/Q1 guidance this week.
The stock is gapping up ~25% this morning as investors pile back in and short-sellers head for cover. More than 20% of the rather small float, or stock available to trade, was sold short.
At $50/share, the stock trades at ~13x 2017 earnings estimates.
The positive report is lifting fellow optical stocks in the premarket:
- II-VI (IIVI) +4.2%, Finisar (FNSR) +3.9%, Lumentum (LITE) +3.4% Acacia (ACIA) +2.9% Oclaro (OCLR) +2.5% Neophotonics (NPTN) +2.4% Ciena (CIEN) +1.6%