(Reuters) - Lumentum Holdings Inc (LITE.O) topped analysts’ estimates for quarterly profit and revenue, driven by stronger demand for its lasers that industry experts say power the Face ID technology on Apple’s latest iPhones.
Shares of Lumentum surged 15 percent on Wednesday, among the largest of a raft of gains for companies seen as key iPhone suppliers after Apple Inc’s (AAPL.O) results on Tuesday that quelled concerns over a slackening in demand for high-end smartphones.
Lumentum’s results were also further evidence that such worries were overdone.
Revenue from Lumentum’s optical communications business, which accounts for more than 80 percent of the company’s total revenue, rose 14 percent in the three months ended March 31, while sales from its lasers business rose 32 percent.
The company also forecast current-quarter revenue and earnings per share above analysts’ expectations.
However, Lumentum expects demand for 3D sensing lasers to be tepid in the June quarter due to seasonality, Chief Executive Officer Alan Lowe said on a conference call with analysts.
“Once production kicks in for the entire iPhone line and some (Android smartphones) in late June, second half of the year should be a huge 3D period,” Needham & Co analyst Alex Henderson said.
Lumentum’s results and forecast appeared “much better than feared given the weak iPhone X sales,” Henderson added.
Lowe also assured investors that he saw no material impact on the company from a recent U.S. ban on American companies from selling to China’s ZTE Corp (000063.SZ).
Lumentum reported net income of $2.7 million, or 4 cents per share, for the third quarter ended March 31, compared with a net loss of $56 million, or 92 cents per share, a year earlier.
On an adjusted basis, the company earned 78 cents per share. Total revenue rose 16.8 percent to $298.2 million.
Analysts on average had expected earnings of 71 cents per share and revenue of $292.2 million.
Reporting by Laharee Chatterjee in Bengaluru; Editing by Maju Samuel and Sai Sachin Ravikumar