Lumentum posted sales for the latest quarter that more than doubled and issued a forecast that vastly exceeded analysts' expectations.
For the first quarter of the 2027 fiscal year that just began, Lumentum expects revenue in the range of $1.225 billion to $1.275 billion, as well as adjusted earnings per share between $4.05 and $4.35. Analysts tracked by FactSet had been looking for $1.157 billion and $3.61, respectively.
The company reported revenue of $1.01 billion for the fourth quarter, up 109% from the prior-year period. The FactSet consensus was for $987.7 million in revenue.
Lumentum posted adjusted EPS of $3.23 for the fourth quarter, up 267% from last year. Wall Street was expecting $2.97. And the company's adjusted gross margin of 50.4% exceeded the 48% that analysts had projected.
CEO Michael Hurlston said on the earnings call that Lumentum previously expected to hit that margin milestone once its quarterly revenue run rate reached $2 billion, but it was actually able to do so "quite a bit sooner" than that.
He said in a statement that Lumentum is positioned "at the heart of a secular industry shift."
"As AI compute workloads increase in both speed and bandwidth, data-center architects are turning to optical links as a primary means of connectivity," he said.
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Lumentum's stock has been a major gainer over the past 12 months, as networking components like transceivers and lasers have proven essential to data-center buildouts - such that they're now in short supply. Shares of Lumentum are up more than 600% in the past year.
Mizuho analyst Vijay Rakesh wrote in a note earlier this month that one thing working in Lumentum's favor is that it's a key supplier of optical equipment for Nvidia (NVDA).
In March, the chip giant invested $2 billion in Lumentum to support its optics technology and research.
Also in March, Lumentum announced a new U.S. manufacturing facility in Greensboro, N.C., to produce lasers for data centers. Nvidia will serve as a customer for the facility, and the company previously said that it is expected to ramp production in mid-2028.
Hurlston said on the earnings call that he would have more updates "over the next couple of quarters" as the company looks to increase its capacity.
-Hannah Pedone
