Shares of semiconductor firm Inphi (IPHI 33.83, -6.71) trade about 16.6% lower this afternoon to near ten-month lows following the company’s modest Q1 report and worse than expected guidance as inventory levels in certain Chinese segments are expected to balloon in the coming period.
For those who may not be familiar, IPHI is a producer of semiconductor and Silicon photonics products. Their offerings allow customers to expand bandwidth and allow for a more expedited transfer of data for long haul, metro and data center applications for both service providers and Cloud operators.
Specifically, IPHI reported in-line Q1 earnings per share (EPS) and revenues of $0.44 and $93.58 million, respectively. The revenue growth was 73% compared to a year ago as an increase in demand for Inphi linear transimpedance amplifiers, linear driver products, ColorZ inter-data center solutions, and coherent DSP from the ClariPhy acquisition.
Additionally, management commented that they were pleased with Q1 results as ColorZ ramped ahead of plan. For Q2, IPHI noted that revenue will adversely be impacted by inventory accumulation in China Long Haul and Metro, which makes up about 40% of worldwide optical communications demand.
Therefore, IPHI guided Q2 earnings and revenues below market expectations as the inventory issues plague the quarter. Specifically, IPHI’s Q2 EPS is slated to come in between $0.27-0.39 on revenues in the range of $80.0-88.0 million.