Applied Optoelectronics (AAOI +3.51%), a company that manufactures fiber optics networking components, probably wishes it had called in sick on Wednesday. Its stock price fell by nearly 6% on the day, no thanks to a quarterly earnings report that displeased investors. That decline was far steeper than the almost 0.8% slide of the S&P 500 index.
Revenue improvement, bottom-line erosion
For its second quarter, Applied booked revenue of $43.3 million, a figure that was higher -- but not overwhelmingly so -- than the $40.7 million it earned in the same period of 2023. It posted losses according to both generally accepted accounting principles (GAAP) and non-GAAP (adjusted) standards; under the latter, its net loss was $10.9 million ($0.28 per share). This was notably deeper than the $6.1 million deficit of the second quarter of 2023.
Those headline figures came close to the consensus analyst estimates. Prognosticators tracking Applied stock were modeling just over $44.1 million for revenue, and an adjusted net loss of $0.29 per share.
Applied said its non-GAAP gross margin was negatively affected by the company's product mix, although it did not detail the reasons for this. It professed to be excited about the second half of this year, not least because it has started to receive orders from an unnamed client it described only as "another large hyperscale customer."
NASDAQ: AAOI
Key Data Points
More net losses expected
Management proffered guidance for Applied's current (third) quarter. It expects revenue of $60 million to $66 million, with adjusted net loss of $5.9 million to $8.6 million. On a per-share basis, the latter range is $0.14 to $0.20. On average, analysts are anticipating a top line sightly exceeding $64.5 million and a per-share adjusted net loss of only $0.13.
