| Author | Message | ||
     Andhrajamesbond Kurra Bewarse Username: Andhrajamesbond Post Number: 2599 Registered: 03-2004 Posted From: 68.93.142.53 Rating: N/A |
We believe top customer Amazon is in a transition, while other customers are growing robustly, and that the market for data center optical transceivers remains healthy. The longer-term outlook for web scale spending is strong, in our view. Even with less share at 100G than it held in 40G, we think Applied Optoelectronics benefits from the overall market growth and has scale and cost efficiency to remain a dominant player. Event: Applied Optoelectronics negatively pre-announced 3Q17 (September) results providing sales guidance of $88-89 million, compared to the prior outlook of $107-115 million. Non-GAAP gross margin is expected to be 43.5-44.5% vs. the prior 43.0-44.5% estimate. It expects EPS of $1.04-1.09 compared to the prior $1.30-1.43 estimate. Amazon bad: Applied Optoelectronics indicated that its past top customer declined to 10% of sales, meaning that Amazon spent $9 million, down from $55 million in the prior quarter. Management asserted that it’s not losing share, but also noted that its visibility into this customer is very poor. We think this is linked to Juniper’s negative preannouncement and a combination of the transition to 100G from 40G and perhaps capacity absorption. We presume Amazon will remain depressed for three quarters. Jagath sathyam..Brahma Midhya. |