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Why Applied Optoelectronics Stock Tanked Today

By Evan Niu, CFA - Feb 26, 2021 at 12:43PM

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The fiber-optics specialist reports fourth-quarter results, but guidance disappointed investors.

What happened

Shares of Applied Optoelectronics (AAOI -1.13%) tanked today, down by 13% as of 11:30 a.m. EST, after the company reported fourth-quarter earnings. The results were mostly in line with expectations, but guidance for the first quarter was lacking.

So what

Revenue in the fourth quarter was $52.3 million, right on target with the consensus estimate. That resulted in an adjusted net loss of $4.8 million, or $0.20 per share, which was slightly better than the $0.23 per share in adjusted losses that analysts were modeling for. The fiber-optics technology company reported a gross margin of 21.6%.

Red stock chart going down

Image source: Getty Images.

"Despite the challenges presented by the pandemic and a slow end to the year, we are encouraged by the double-digit revenue growth we delivered in 2020, which was driven by growth in each of our three major business segments," CEO Dr. Thompson Lin said in a statement. "We are pleased to have secured an additional 30 total design wins in 2020, on par with last year's total."

Now what

In terms of guidance, Applied Optoelectronics is forecasting revenue in the first quarter to be $47 million to $51 million, while Wall Street is expecting the company to report sales of $51 million. That means the company will need to hit the high end of its forecast to meet expectations. That should result in an adjusted net loss per share of $0.23 to $0.28, compared to the consensus estimate of $0.25 per share in adjusted net losses.

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