Before the market opened for trading yesterday, Applied Optoelectronics put out a press release (for the third quarter in a row) saying that their numbers for the June quarter would exceed their prior guidance and also come in well ahead of Street expectations.
The company said that it now sees June quarter revenues of $117.3 million and earnings between $1.31 and $1.36 per share ($1.33 per share at the mid-point). Wall Street consensus was $110.22 million and $1.15 per share.
Im 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.
Here are the new parameters as announced by Applied Optoelectronics for the June quarter:
- Revenue of approximately $117.3 million, above the prior outlook of $106.0 million to $112.0 million.
- GAAP and non-GAAP gross margin in the range of 45.0% to 45.4%, above the prior non-GAAP outlook of 41.0% to 42.5%.
- GAAP net income in the range from $28.0 million to $29.0 million and non-GAAP net income after tax in the range from $26.6 million to $27.6 million, above the prior non-GAAP outlook of $22.2 million to $24.3 million.
- GAAP fully diluted earnings per share in the range of $1.37 to $1.42 and non-GAAP fully diluted earnings per share in the range of $1.31 to $1.36, using a weighted-average fully diluted share count of approximately 20.4 million shares. This is above the prior non-GAAP outlook of $1.09 to $1.19 per share, using approximately 20.4 million shares.
A couple of sellsiders chimed in post the positive pre-announcement with their usual reactive price target raises and said that their models and estimates going forward would have to be adjusted upwards.
To me, the most telling was the huge upward guidance in gross margins going forward. As one analyst put it, gross margins in the 45% plus range "have never been seen before in the optical component industry."
Incidentally, last week I had tweeted that investors should be on the lookout for a positive pre-announcement from Applied Optoelectronics.