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Is a Beat in the Cards for Lumentum (LITE) in Q3 Earnings?

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Lumentum Holdings (LITE - Free Report) is slated to report third-quarter fiscal 2021 results on May 12.

The company expects non-GAAP earnings in the range of $1.31-$1.46 per share. The Zacks Consensus Estimate for fiscal third-quarter earnings per share has remained stable in the past 30 days at $1.42 per share. The figure suggests an increase of 12.7% from the prior-year quarter’s levels.

Lumentum projects fiscal third-quarter revenues between $425 million and $440 million.

The consensus mark for revenues is pegged at $435.11 million, indicating increase of 8% from the year-ago quarter’s reported figure.

Notably, the company has a trailing four-quarter earnings surprise of 22.43%, on average.

Lumentum Holdings Inc. Price and EPS Surprise

 

Lumentum Holdings Inc. Price and EPS Surprise

Lumentum Holdings Inc. price-eps-surprise | Lumentum Holdings Inc. Quote

 

Factors to Note

Incremental adoption of Lumentum’s Datacom solutions is expected to have benefited the fiscal third-quarter performance. Moreover, continued demand in global network bandwidth requirements and for building infrastructure related to 5G are likely to have acted as key tailwinds in this regard.

Further, continued momentum in demand for the company’s ROADMs and other critical infrastructure solutions, amid coronavirus crisis led work-from-home and online learning wave, might get reflected in the to-be-reported quarter’s results. Also, increasing demand for 3D sensing and LiDar solutions is expected to have benefitted the top line performance in the to be reported quarter.

For third-quarter fiscal 2021, Lumentum expects Telecom and Datacom revenues to decline sequentially, due to seasonal factors and the expected “timing of new end customer deployments.” The Zacks Consensus Estimate for fiscal third-quarter Telecom and Datacom revenues is pegged at $270 million.

Consumer and Industrial revenues are also anticipated to be down sequentially due to seasonality. The Zacks Consensus Estimate for fiscal third-quarter Consumer and Industrial revenues stands at $133 million.

Notably, the Zacks Consensus Estimate for fiscal third-quarter Optical Communications revenues’ segment is pegged at $402 million, indicating year-over-year growth of 12%.

Revenues from Commercial Lasers are projected to improve quarter-over-quarter basis due to recovery witnessed in served markets. The Zacks Consensus Estimate for Commercial Lasers revenues is pegged at $34.04 million for the fiscal third quarter.


Nonetheless, increasing expenditures on product development amid increasing competition might have impacted fiscal third-quarter profitability.

What the Zacks Model Unveils

Our proven model doesn’t conclusively predict an earnings beat for Lumentum this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.

Lumentum has an Earnings ESP of 0.00% and a Zacks Rank #3 (Hold). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks that Warrant a Look

Here are a couple of other companies, which have the right combination of elements to post an earnings beat this quarter:

Agilent Technologies (A - Free Report) has an Earnings ESP of +1.57% and sports a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Pure Storage (PSTG - Free Report) has an Earnings ESP of +10.81% and carries a Zacks Rank of 2, at present.

NVIDIA (NVDA - Free Report) has an Earnings ESP of +2.51% and currently carries a Zacks Rank of 2.

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