Applied Optoelectronics, Inc. (AAOI) stock prices were down 1.31% as of the market closing on July 15th, 2021, bringing the price per share down to USD$7.52. Subsequent premarket fluctuations saw the stock fall by another 5.59%, bringing it down to USD$7.10.
Weathering the Storm
With the company having appropriately forecasted market dynamics, its financial reports for the first quarter of 2021 were in line with its expectations. While the data center business reported minor softening, the stellar recovery seen by the telecom market more than made up for it, as did the continued strength of the company’s CATV business. The quarter culminated with a significant backlog of CATV products, which the company expects to facilitate the driving of growth in the second quarter of 2021.
Financial Improvement
GAAP revenue for the first quarter of 2021 was reported at USD$49.7, up from the USD$40.5 reported for the first quarter of 2020. The previous quarter reported GAAP revenue in the amount of USD$52.3. GAAP gross margin was up to 21.6% for the quarter, up from the 15.7% reported in the prior-year quarter. Non-GAAP gross margin was up to 24.6% from the 19.5% reported for the first quarter of 2020, down from 27.5% in the prior quarter.
GAAP Net Loss
AAOI reported GAAP net loss in the amount of USD$15.6 million for the 2021 quarter, representing a net loss of USD$0.59 per basic share. This is an improvement from the USD$16.8 million net loss reported for the prior year quarter, representing a net loss of USD$0.83 per basic share for Q1 2020. However, this is still up from the USD$13.4 million reported for Q4 2020, coming out to USD$0.57 per basic share.
Trajectory of Success
The company anticipates revenues for the second quarter of 2021 to be in the range of USD$51 million and USD$56 million. Based on market dynamics, non-GAAP gross margin is expected to be in the range of 25.5% and 27.5%. Non-GAAP net loss is forecasted to be in the range of USD$3.8 million to USD$5.6 million, representing a loss per share of USD$0.14 to USD$0.2, based on roughly 27.2 million shares.
Future Outlook for AAOI
With the pandemic continuing to rage on despite accelerated global efforts towards universal immunizations, AAOI’s investors are looking to the company for strategic decisions or changes in fundamentals to address the persisting adverse market environment. The company is keen to allocate resources towards facilitating meeting its guidance for the second quarter of 2021.
