Acacia Communications Whiffs on Q4 Earnings

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When Acacia Communications Inc. (NASDAQ: ACIA) reported its most recently quarterly results late on Thursday, the firm said that it had $0.27 in earnings per share (EPS) on $86.6 million in revenue. That compared with consensus estimates of $0.28 in EPS on revenue of $93.2 million.

During the quarter, the company was able to increase its gross margins and cash balance on a quarter-over-quarter basis, demonstrating the strength of its leveraged business model. Gross margin totaled 44.5%.

While Acacia is projecting first-quarter 2018 revenue to be down sequentially, like others in its industry, management sees signs of improving market conditions in 2018, although it continues to remain cautious.

In terms of the outlook for the first quarter, the company expects to see EPS in the range of $0.01 to $0.10 and revenues between $67 million and $74 million. The consensus estimates call for $0.28 in EPS on $93.21 million in revenue.

On the books, Acacia’s cash and cash equivalents totaled $67.5 million at the end of the quarter, down from $206.4 million in the same period from last year.

Raj Shanmugaraj, president and CEO of Acacia, commented:

While we continue to face some headwinds in the market, our fourth quarter 2017 results were in-line with our expectations. Our team at Acacia continued to execute well on new product introductions and on our ongoing customer diversification efforts. We are pleased with our product roadmap and believe we are well positioned to take advantage of market opportunities as conditions improve.

Shares of Acacia were last seen down 18% at $34.30 on Friday, with a consensus analyst price target of $47.58 and a new 52-week range of $33.69 to $61.15.