Applied Optoelectronics | $AAOI Stock | Shares Sink On Lowered Q3 Revenue Forecast

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Applied Optoelectronics, Inc. (NASDAQ: AAOI)

 

Texas-based Applied Optoelectronics has revised its third-quarter revenue guidance downward because of a problem identified with its 25G lasers. The company said it had temporarily halted shipments of some transceivers equipped with the affected lasers.

However, only less than 1% of the lasers were found to have the issue, according to a statement released by the company on Friday morning. The company has since solved the problem and began shipping the products again.

The firm, which designs and manufactures optical communications products, now projects revenue in the range of $55 million to $58 million for its third quarter. Its previous outlook was in the range of $82 million to $92 million, while analysts had estimated of $88.3 million.

Shares of the company went down as much as 22% before markets opened for regular trading on Friday.

Applied Optoelectronics CEO Comments

Dr. Thompson Lin, the president and chief executive officer said, “During the third quarter, we identified an issue with a small percentage of 25G lasers within a specific customer environment. Consistent with AOI’s commitment to supreme product quality and customer support, we mutually agreed with the customer to temporarily suspend shipments of certain transceivers utilizing these lasers while we worked to gain a deeper understanding of the scope of the issue and implement a solution. We have since determined that less than one percent of these lasers were subject to this issue, we have enacted a solution and with the agreement of the customer, resumed shipments.”

Lin continued, “We hold ourselves to a very high standard at AOI and the measures we took this quarter reflect our strong commitment to our customers. We believe that our customers appreciate our willingness to thoroughly resolve any issues, even at the expense of a delay in our revenue, and we believe that we continue to have strong relationships with our customers. Outside of the temporary delay in shipments that impacted our third quarter revenue, sales and shipments as well as the pricing environment were consistent with our prior expectations.”

Applied Optoelectronics, Inc Company Profile

Applied Optoelectronics, Inc. designs, manufactures, and sells various fiber-optic networking products worldwide. It offers optical modules, lasers, transmitters and transceivers, and turn-key equipment, as well as headend, node, and distribution equipment.

The company sells its products to Internet data center operators, cable television and telecommunications equipment manufacturers, and Internet service providers through its direct and indirect sales channels.

The company competes with Finisar Corporation, Oclaro, Inc., Foxconn Interconnect Technology Ltd., EMCORE Corporation, Lumentum Holding, Inc., Sumitomo Electric Industries, Ltd., Mitsubishi, Molex, LLC, Source Photonics.

Applied Optoelectronics, Inc. was founded in 1997 and is headquartered in Sugar Land, Texas. – Yahoo Finance

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