$NPTN - NeoPhotonics Corporation (NPTN) Stock Price Looking to Test Recent Highs

NeoPhotonics Corporation develops, manufactures, and sells optoelectronic products that transmit, receive, and switch high speed digital optical signals for communications networks. It offers high speed products, including transmitter, receiver, and switching products for 100G (gigabits per second) and optical transmission applications over distances of 2 to 2,000 kilometers; optical components for coherent systems, including narrow linewidth tunable transmit and local oscillator lasers (NLW-ITLA) that generate ultra-pure wavelength or color for coherent transmission, as well as coherent micro-modulators, which encode the information on the intensity and phase of the optical beam; and integrated coherent receivers (ICRs) that decode the phase and polarization encoded coherent signals. The company also engages in developing pluggable coherent modules that combine NLW-ITLA with ICR and a coherent modulator; and offers 100G products for the client side and datacenter applications. In addition, it offers network products and solutions, including application-specific passive optical functionalities in modules or sub-system configurations; transceiver modules for various low speed access and mobile backhaul applications; and products for test and measurement, instrumentation, industrial, and research applications. The company sells its products to network equipment manufacturers through a direct sales force in North America, Europe, and Asia. The company was formerly known as NanoGram Corporation and changed its name to NeoPhotonics Corporation in 2002. NeoPhotonics Corporation was founded in 1996 and is headquartered in San Jose, California.

Tuesday after the integrated-optoelectronic device specialist announced far-better-than-expected second-quarter 2019 earnings.

More specifically, NeoPhotonics' quarterly revenue grew 1% year over year to $81.7 million, well above estimates for a 4.6% decline. That translated to an adjusted net loss of $0.03 per share, narrowed from a $0.19-per-share loss a year earlier, and also far above expectations for a $0.09-per-share loss.

So what

NeoPhotonics' high-speed products were the primary source of its relative strength, representing 89% of total revenue in the quarter. The company also saw adjusted EBITDA improve to $6.8 million, swinging from an adjusted EBITDA loss of $0.8 million in last year's second quarter.

"Market drivers are well aligned with our advanced technologies and high-speed capabilities," elaborated NeoPhotonics chairman and CEO Tim Jenks. "These trends transcend the current Huawei ban and, coupled with the continued demand with hyperscale data centers, we are optimistic about NeoPhotonics' new product prospects."

Now what

For the third quarter of 2019, NeoPhotonics expects revenue of $87 million to $93 million, with adjusted net income ranging from negative $0.03 per share to $0.07 per share. Here again, even the low end of both ranges stood well ahead of analysts' consensus estimates for an adjusted net loss of $0.11 per share on revenue of roughly $66 million.