2023-04-17 11:37:15 ET
Viavi Solutions stock ( NASDAQ: VIAV ) has slipped 8.2% after disclosing preliminary third-quarter results that pointed to weaker-than-expected revenues and margins.
The company expects revenue of $246M-$248M, down from prior guidance of $256M-$276M, pointing to weakness in its Network & Service Enablement unit that saw "higher than expected pullback in demand for Lab products."
The pullback in R&D spend at network equipment manufacturers (NEMs) and semiconductor companies was much higher than anticipated," CEO Oleg Khaykin said. "The spending conservatism and rapid slowdown that we saw in the Service Provider and Data Center spend at the end of fiscal first quarter is now percolating down to the system and component suppliers.
The rest of the NSE business came in line with expectations, though, he added. "We continue to see stabilization of demand for our field instruments. Our OSP business segment revenue was also within our initial expected range. Our previously announced cost reduction measures are progressing on schedule, and we expect them to be substantially complete by end of this fiscal year."
The company's preliminary non-GAAP operating margin is now seen at 10.5%-11.5% , down from previous guidance for 13%-14.2%.
Viavi is set to host its earnings call May 2 at 4:30 p.m. ET .
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Viavi falls 8% as preliminary third-quarter revenues fall short