Lumentum cuts outlook as it becomes latest company to halt Huawei shipments
LUMENTUM HLDNGS
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00:00 19/03/24
Lumentum has ceased shipments to Huawei, the Chinese telecoms giant, forcing the US technology company to slash its quarterly outlook.
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The US Department of Commerce last week added Huawei to a list of 44 Chinese entities subject to export controls, and on Monday optical components specialist Lumentum said it would fully comply with the decision.
It said: "Lumentum has discontinued all shipments effective as of the date the licensing requirements went into effect, and cannot predict when it will be able to resume shipments."
Huawei is one of Lumentum’s biggest clients, with sales to the Chinese company representing 11% of its total revenue in the year to June 2018.
In the most recent third quarter to 30 March 2019, sales to Huawei represented 18% of total revenue.
Lumentum said net revenue for the fourth quarter was now likely to come in between $375m and $390m, compared to $405m to $425m prior to the ban. Diluted net income per share is now expected to range from $0.65 to $0.77, down from previous forecasts of between $0.85 and $1.00.
Shares in Lumentum fell heavily after the announcement by Washington last week and in pre-market trading on Monday, the stock was off a further 5%.
Earlier it emerged that Google parent Alphabet was suspending the delivery of key software and technical services to Huawei. The move is a massive blow to the Chinese company, as it smartphones run on Google’s operating system Android.