What happened
Viavi Solutions (VIAV -0.25%) published preliminary results for its recently ended quarter on Monday, and investors clearly weren't happy with them. Following the move, the market sold out of Viavi stock to the point where it booked a more than 9% loss on the day. In sharp contrast, the S&P 500 index finished Monday in positive territory, at 0.3%.
So what
For its fiscal third quarter of 2023, Viavi believes it will post revenue of $246 million to $248 million. Rather uncomfortably, this is notably below its most recent guidance of $256 million to $276 million for the period. It's also substantially below the average analyst estimate, which according to data compiled by Yahoo! sits slightly north of $269 million.
Viavi, once upon a time known as JDS Uniphase, specializes in testing and monitoring solutions for the communications sector.
Management attributed the anticipated shortfalls chiefly to weakness in its core network and service enablement operations. These suffered a worse-than-expected decline in demand for laboratory products.
"The pullback in R&D spend at network equipment manufacturers (NEMs) and semiconductor companies was much higher than anticipated leading to revenue and non-GAAP (adjusted) operating margin coming in below the lower end of our guidance," Viavi quoted its CEO Oleg Khaykin as saying.
Said operating margin is now expected to land at 10.5% to 11.5%; previously, the company guided for 13% to 14.2%.
Now what
Viavi is scheduled to reveal its third-quarter earnings on Tuesday, May 2. Management will host a conference call at 4:30 PM ET that day to discuss the results.
