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Applied Optoelectronics (AAOI) Stock Falls 29% After Disappointing Q3 Guidance

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Shares of Applied Optoelectronics, Inc. (AAOI - Free Report) fell 29% in morning trading on Friday after posting its second-quarter fiscal 2017 financial results. While the fiber-optic component supplier beat Q2 estimates, it reported disappointing Q3 guidance.

Applied Optoelectronics expects “softer-than-expected demand for our 40G solutions with one of our large customers that will offset the sequential growth and increased demand we expected in 100G.”

As a result, the company’s revenue guidance of $107-$115 million fell below Wall Street’s expectations of $123 million, as did the company’s projected earnings range of $1.30-$1.43 per share.

However, Applied Optoelectronics did beat estimates for its second-quarter. The company posted earnings of $1.43 per share, beating our consensus estimate of $1.29 per share. The company also saw revenue figures of $117.37 million, beating our consensus estimate of $115.64 million and representing a 112% increase year-over-year.

“We are pleased with our team’s continued solid execution this quarter. We believe AAOI has a leading position in the advanced optics market and we continue to expand with our existing customer base as well as engage with new customers for 100G technologies and beyond,” said President and CEO Dr. Thompson Lin.

“We believe our ability to leverage our vertical integration and proprietary manufacturing processes to drive greater efficiencies and shorten our production cycle times sets AOI apart from others in the industry.”

AAOI remains a Zacks Rank #1 (Strong Buy), with a Growth score of ‘A.’ The company’s stock has gained roughly 200% this year.

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