By Kit Norton

Lumentum reported mixed fiscal third-quarter earnings results late Tuesday with sales surging, but slightly missing Wall Street's lofty expectations. The optical networking giant continues to benefit from the appetite for its products brought on by the artificial intelligence data center boom.

Lumentum posted adjusted earnings of $2.37 a share, compared with 57 cents a share a year ago and above Wall Street's $2.27 a share expectation. Revenue jumped 90% to $808.4 million but just missed the analyst consensus estimate for revenue of $810 million, according to FactSet.

In February, Lumentum forecast third-quarter profit between $2.15 a share and $2.35 a share with sales ranging from $780 million to $830 million.

The company also reported operating margin of 32.2% in the quarter, compared with 10.8% a year ago.

Shares fell 5% in after-hours trading after ending the regular session up 1.9% to $994.56 on Tuesday. Lumentum stock has soared 170% so far this year, last booking a monthly decline in April 2025, and joined the S&P 500 in March as part of the index's quarterly rebalancing.

"Margin improvement has been driven by many factors," CEO Michael Hurlston said in the earnings release. "As our key growth drivers of co-packaged optics and optical circuit switches begin to kick in, we would expect further increases in earnings power."

For the fiscal fourth quarter, Lumentum forecasts revenue between $960 million and $1.01 billion with earnings ranging from $2.85 a share to $3.05 a share. The low end of both the profit and sales estimates are well above Wall Street's $2.69 a share and $917 million estimates.

Lumentum and peer Coherent have both benefited from a surge in hyperscaler capital spending that has boosted their share prices. The optical networking companies make the technology that allows AI processing chips to communicate with each other.

In March, Nvidia announced it was investing $2 billion each in both Lumentum and Coherent, along with multibillion-dollar purchase commitments with the two companies.

Hurlston last month said the company was on track to fill out its order book through 2028, as demand for the components needed to connect graphic processing unit, or GPU, clusters grows faster than supply can be manufactured.

Write to Kit Norton at kit.norton@barrons.com

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May 05, 2026 16:36 ET (20:36 GMT)

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