- Lowers Q2 EPS to $1.15-1.34 from $1.60-1.75 vs $1.67 S&P Capital IQ Consensus; revs to $335-355 mln from $405-430 mln vs $420.47 mln S&P Capital IQ Consensus
- "We recently received a request from one of our largest Industrial and Consumer customers for laser diodes for 3D sensing to materially reduce shipments to them during our fiscal second quarter for previously placed orders that were originally scheduled for delivery during the quarter," said Alan Lowe, President and CEO. "With our proven ability to deliver high volumes, years of experience, hundreds of millions of devices in the field, and new product and customer funnel, we remain confident in our leadership position in the nascent market for laser diodes for 3D sensing."
- Note the customer is likely Apple (AAPL), which seems to confirm shipment cuts reported by Nikkei last Monday.
Lumentum is the main supplier for vertical-cavity surface-emitting lasers (VCSELs), which enable 3D sensing (Face ID) technology in Apple's (AAPL -2.8%) iPhone. This jives with what the Nikkei reported one week ago, that Apple had recently cut orders for the iPhone XR and increased orders for the iPhone 8 and 8 Plus. The iPhone XR is the newest lower cost option while the 8/8+ are last year's cheaper models without 3D sensing/Face ID capability.
Recall Apple offered soft guidance for the holiday quarter on November 1 while announcing it will no longer disclose product shipment disclosures going forward. Apple is using higher priced iPhones to drive growth in a stagnant/saturated smartphone market where the replacement cycle is getting longer. Bernstein said Apple's guidance implied shipments down 5-10% year-over-year.
The number two and three VCSEL suppliers II-VI (IIVI -2.7%) and Finisar (FNSR -3.4%) announced a merger on Friday morning.
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