This optic company beat earnings estimates, posting earnings of $1.54 per share, compared to the estimate of $1.32, but shares fell when the company’s third quarter guidance fell short of analysts’ forecasts.
Applied Optoelectronics’ (AAOI)
From Upside
A leading maker of fiber-optic networking gear, Applied Optoelectronics’ (AAOI) designs and makes a majority of the laser chips and optical components used in its products. Its vertically integrated manufacturing offers several competitive advantages, including rapid product development, fast response times to customers, and improved control over product quality and costs.
Applied is benefiting from increased spending on cloud computing data centers, reflecting strong demand from Amazon and Facebook. The move to higher-bandwidth networks is also driving growth.
On July 13, Applied Optoelectronics preannounced per-share earnings of $1.31 to $1.36, up from $0.16 a year earlier (WSBI Editor’s note: see above; the company beat earnings estimates by $0.22 and also exceeded its previous guidance). Revenue is projected to more than double to $117 million.
This company compares favorably to industry peers based on Quadrix scores for Momentum, Quality, and Overall. The stock is rated Buy.
Richard J. Moroney, CFA, Upside, www.upsidestocks.com, 800-233-5922, August 2017