Viavi Solutions Inc (NASDAQ: VIAV) reported a loss of $46 million and the revenue was reported as $880.4 million.
VIAV in the fourth quarter of FY 18 has reported the adjusted earnings per share of 14 cents, beating the analysts’ estimates for the adjusted earnings per share of 11 cents as per Zacks Investment Research. The company had reported the adjusted revenue growth of 33.3 percent to $264 million in the fourth quarter of FY 18, beating the analysts’ estimates for revenue of $255.5 million. The revenue grew primarily due to the growth in NSE. The company’s NSE revenue is at $210.8 million, that has exceeded the midpoint of the guidance range of $195 million to $250 million while OSP revenue is at $53.2 million, exceeded its guidance range of $48 million to $52 million.
The company has posted the operating margins of 14%, exceeded the 10.5% to 12.5% guidance range with both NSE and OSP exceeding the company’s expectation.
Moreover, in the fourth quarter, NSE revenue is at $210.8 million including the recent AvComm and Wireless acquisition grew 56.7% year-on-year. The combined AvComm and Wireless performed better than the company’s expectation in fiscal fourth quarter. Excluding the acquisition, NSE revenue organically grew 8.2% driven by 7.5% organic growth in NE and 10.5% growth in SE. NE’s growth was due to the strength in cable and fiber field instruments and a strong year-on-your performance in the Lab & Production test products. The company’s SE revenue grew from a year ago levels due to the double-digit percentage growth in both data center and growth assurance product lines but was partially offset by the expected declines in the mature assurance products. The revenue mix between the SE’s growth products and the decline in mature products in fiscal Q4 was 83% versus 17% respectively. NSE gross margins at 62.5% declined 210 basis points year-on-year as a result of unfavorable product mix.
For the first quarter of 2019, VIAV expects its per-share earnings to be in the range from 12 cents to 15 cents. The company expects revenue in the range of $257 million to $277 million for the fiscal first quarter.
Recently, Needham analyst Alex Henderson upgraded the stock to buy from hold. As per the analyst 3D volumes are expected to double in CY19 from CY20 and Viavi believes it has a lock on the business with patents. The analyst estimated that 3D sensing could contribute at least 3 cents to 5 cents in incremental EPS between fiscal 2018 and fiscal 2019, as well as in fiscal 2020. He has given a $13.50 price target on the stock.