CEO and founder Dr. Thompson Lin said revenue "was slightly below our expectations due to lower demand from our datacenter customers as they continue to evolve their network architectures."
Added Lin, "While our revenue came in slightly below expectations, I am pleased with our ability to continue to generate strong gross margin even in a price sensitive market."
Applied's gross profit margin in the quarter rose to 41% from 38% in the year-earlier quarter, though it was down from 44% in the immediately prior quarter.
Lin said the second half of this year will be better than the first:
Even though we see inventory headwinds with one of our customers and the typical seasonality in Q1 due to fewer production days in China because of the Lunar New Year, we continue to expect the second half of 2018 to be stronger than the first half. We believe we have a strong leadership position in advanced optics, and this belief is bolstered by a large purchase commitment that we disclosed earlier today.
Revenue in the three months ended in December rose to $79 million, yielding EPS of 89 cents excluding some costs.
Analysts had been modeling $85.5 million and 83 cents a share in net income.
For the current quarter, the company sees revenue in a range of $67 million to $71 million, well below consensus of $86.4 million. EPS is seen in a range of 28 cents to 34 cents, versus the consensus of 69 cents.
Update: Applied Opto stock is recouping some of its losses after hours following the appearance of an 8-K filing with the Securities & Exchange Commission in which the company said it entered into a supply agreement to Facebook whose value may be worth $125 million to Applied this year.
