NeoPhotonics (NPTN) to be acquired by Lumentum (LITE) for $16.00/share

• Agreed to be acquired by Lumentum (LITE) for $16.00/share in cash, representing a total equity value of approx. $918 mln. Also reported upside Q3 results; products capable of use for 400G and above applications were 50% of revenue. At multi-year highs. 

   

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NeoPhotonics agrees to be acquired by Lumentum (LITE) for $16.00/share in cash

• Lumentum and NeoPhotonics announced that they have entered into a definitive agreement under which Lumentum will acquire NeoPhotonics for $16.00/share in cash, which represents a total equity value of approx. $918 mln.
  • Lumentum intends to finance the transaction through cash from the combined company's balance sheet.
  • Related to the transaction, Lumentum will provide up to $50 mln in term loans to NeoPhotonics to fund anticipated growth.
• The addition of NeoPhotonics expands Lumentum's opportunity in some of the fastest growing areas of the more than $10 bln market for optical components used in cloud and telecom network infrastructure.
• The combined company is expected to generate more than $50 mln in annual run-rate synergies within 24 months of the closing of the transaction. The transaction is expected to be immediately accretive to the combined company's non-GAAP EPS upon closing.
• The transaction has been unanimously approved by the Boards of Directors of both companies. The transaction is expected to close in the second half of calendar year 2022.

Coherent (COHR) to be acquired by Lumentum (LITE) for $5.7 bln, creating a laser giant

• Update March 25 (Reuters) - Coherent Inc on Thursday agreed to a $7 billion buyout offer from optical components maker II-VI Inc, walking away from a bid from Apple supplier Lumentum Holdings Inc that had put the laser maker into play two months ago. (timeline)
  
• Coherent, which is paying nearly $218 million to Lumentum for terminating the deal, said it made the final call after comparing benefits and the potential risks of each proposal.

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Coherent  (COHR) soared on Tuesday after the laser maker agreed to be acquired by rival Lumentum Holdings for $5.7 billion in cash and stock. Coherent holders will receive $100 in cash and 1.1851 Lumentum shares for each Coherent share, about $214 in value. At closing, Coherent (COHR) holders will own about 27% of the combined company. 

  

=Lumentum (LITE) reported earnings on Thur 8 Aug 2019 (b/o)

Lumentum beats by $0.20, beats on revs; guides Q1 EPS above consensus, revs in-line

Reports Q4 (Jun) earnings of $0.92 per share, excluding non-recurring items, $0.20 better thanthe S&P Capital IQ Consensus of $0.72; revenues rose 34.4% year/year to $404.6 mln vs the $383.54 mln S&P Capital IQ Consensus.

Non-GAAP operating margin of 22.5% to 24.5%.

Co issues guidancefor Q1, sees EPS of $1.12-1.26, excluding non-recurring items, vs. $1.11 S&P Capital IQ Consensus; sees Q1 revs of $435-455 mln vs. $439.80 mln S&P Capital IQ Consensus.

-=Lumentum (LITE) lowers Q2 guidance based on reduced shipments of its 3D sensing lasers

• Lumentum (LITE) cuts Q2 guidance based on what seems like reduced shipments for its 3D sensing lasers, a key component for Face ID in the iPhone , noting "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."

• 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.

=Lumentum (LITE) reported earnings on Thur 1 Nov 2018 (b/o)

Lumentum beats by $0.29, reports revs in-line; guides Q2 EPS above consensus, revs below consensus

• Reports Q1 (Sep) adj. earnings of $1.31 per share, $0.29 better than the S&P Capital IQ Consensus of $1.02; revenues rose 45.7% year/year to $354 mln vs the $351.21 mln S&P Capital IQ Consensus.
• Co issues mixed guidance for Q2, sees EPS of $1.60-1.75, excluding non-recurring items, vs. $1.52 S&P Capital IQ Consensus; sees Q2 revs of $405-430 mln vs. $431.78 mln S&P Capital IQ Consensus. 
• "Strong telecom and fiber laser demand, along with 3D sensing expansion across multiple customers and their products drove solid first quarter results," said Alan Lowe, President and CEO. "Revenues were up more than 45% relative to the prior year, and we saw new record revenues in ROADMs and fiber lasers. Our strategic investments in differentiated products targeting growth markets reliant on photonics have proven successful and position us well for the years to come."

-=Oclaro (OCLR) to be acquired by Lumentum (LITE) for $9.99 per share

• Other leading optical stocks: AAOI +7.63% ACIA +5.40% NPTN +4.32% LITE +2.57% FNSR +2.72% IPHI +2.02% IIVI +1.56% VIAV +1.27% INFN +1.20% LPTH +0.86% COHR +1.01% CIEN +0.52% ADTN +0.61%

Oclaro to be acquired by Lumentum (LITE) for $9.99 per share 

• Lumentum Holdings (LITE) and Oclaro (OCLR) announced that the two companies have signed a definitive agreement, unanimously approved by the boards of directors of both companies, pursuant to which Lumentum will acquire all of the outstanding common stock of Oclaro.
• For each share of Oclaro stock held, Oclaro stockholders will be entitled to receive $5.60 in cash and 0.0636 of a share of Lumentum common stock, subject to the terms of the definitive agreement.
• The transaction values Oclaro at $9.99 per share or ~$1.8 billion in equity value, based on the closing price of Lumentum's stock on March 9, 2018, of $68.98.
• The transaction value represents a premium of 27% to Oclaro's closing price on March 9, 2018 and a premium of 40% to Oclaro's 30 day average closing price. Oclaro stockholders are expected to own approximately 16% of the combined company at closing.
• The transaction is expected to generate more than $60 million of annual run-rate synergies within 12 to 24 months of the closing and be immediately accretive to non-GAAP earnings per share.
• Lumentum intends to fund the cash consideration with a combination of cash on hand from the combined companies' balance sheets and $550 million in debt financing. The transaction is expected to close in the second half of calendar 2018, subject to approval by Oclaro's stockholders, antitrust regulatory approval in the US and China, and other customary closing conditions

=Lumentum Holdings (LITE)

Telecommunications equipment company

• Headquarters: Milpitas, CA
• Founded: 2015
• Subsidiaries: JDS Uniphase Inc, Lumentum Operations LLC
• https://www.lumentum.com/en

Description

Lumentum Holdings Inc. is a provider of optical and photonic products for a range of end market applications, including data communications (Datacom) and telecommunications (Telecom) networking and commercial lasers (commercial lasers) for manufacturing, inspection and life-science applications. The Company operates in two segments: Optical Communications (OpComms) and Commercial Lasers (Lasers). The Company's OpComms products include a range of components, modules and subsystems to support and maintain customers in its two primary markets: Telecom and Datacom. The Company's Lasers products serve customers in markets and applications, such as manufacturing, biotechnology, graphics and imaging, remote sensing, and precision machining, such as drilling in printed circuit boards, wafer singulation and solar cell scribing. The Company's customers include original equipment manufacturers (OEMs).

Key stats and ratios

	Q3 (Sep '17)	2017
Net profit margin	2.92%	-10.23%
Operating margin	1.11%	4.75%
EBITD margin	-	12.04%
Return on average assets	2.30%	-10.46%
Return on average equity	4.39%	-18.53%
Employees	2,057

=Finisar (FNSR) to receive $390 mln as part of Apple's advanced manufacturing fund

Finisar is a manufacturer of optical communication components and subsystems. In 2008, Finisar merged with Optium Corporation.

• Headquarters: Sunnyvale, CA
• finisar.com
• Face ID tech company

• LITE also makes VCSELs for 3D sensing. IIVI is also in the space.

Finisar to receive $390 mln as part of Apple's advanced manufacturing fund  

Apple (AAPL) announced the latest award from its $1 billion Advanced Manufacturing Fund. Finisar, a leading manufacturer of optical communications components, will receive $390 million as part of Apple's commitment to support innovation and job creation by American manufacturers.

• As a result of Apple's commitment, Finisar will transform a long-shuttered, 700,000-square-foot manufacturing plant in Sherman, Texas, into the high-tech VCSEL capital of the US.

The award will enable Finisar (FNSR) to exponentially increase its R&D spending and high-volume production of vertical-cavity surface-emitting lasers (VCSELs). VCSELs power some of Apple's most popular new features, including Face ID, Animoji and Portrait mode selfies made possible with the iPhone X TrueDepth camera, as well as the proximity-sensing capabilities of AirPods.

VCSEL technology is a better performing, more compact and cost-efficient solution compared to traditional edge-emitting lasers for many emerging applications. Apple has rapidly adopted depth-sensing technology in recent years, leading to the development and production of the most advanced VCSELs used in the history of consumer electronics. In the fourth quarter of 2017, Apple will purchase 10 times more VCSEL wafers than were previously manufactured worldwide over a similar time period.

Description

Finisar Corporation (Finisar) is a provider of optical subsystems and components that are used in data communication and telecommunication applications. The Company's optical subsystems consist of transmitters, receivers, transceivers, transponders and active optical cables, which provide the fundamental optical-electrical or optoelectronic interface for interconnecting the electronic equipment used in these networks, including the switches, routers, and servers used in wireline networks. These products rely on the use of semiconductor lasers and photodetectors in conjunction with integrated circuits and optoelectronic packaging to provide a means for transmitting and receiving digital signals over fiber optic cable at speeds ranging from less than one gigabit per second (Gbps), to more than 100 Gbps, over distances of less than 10 meters to more than 2,000 kilometers, using a range of network protocols and physical configurations.

Key stats and ratios

	Q4 (Oct '17)	2017
Net profit margin	1.76%	17.20%
Operating margin	2.85%	12.20%
EBITD margin	-	18.77%
Return on average assets	0.90%	11.92%
Return on average equity	1.45%	18.26%
Employees	14,000

JDSU (JDSU) split into Viavi Solutions (VIAV) and Lumentum Holdings (LITE)

JDSU (JDSU) split into two different companies: Viavi Solutions (VIAV) and Lumentum Holdings (LITE).

     

• VIAVI Solutions commenced trading on NASDAQ Stock Market under ticker symbol VIAV on August 4, 2015.
• The JDSU ticker symbol retired from trading at the close of market today, August 3, 2015.