Applied Optoelectronics slashes Q3 revenue guidance after product issue affects shipments

Applied Optoelectronics Inc (NASDAQ:AAOI) shares slipped after the tech company slashed its third-quarter revenue guidance due to an issue with some of its lasers.

The Texas-based company expects third-quarter revenue of $55 million to $58 million compared with previous guidance of $82 million to $92 million.

READ: Applied Optoelectronics tops Wall Street estimates in its Q2 results

The revenue estimate is far below analyst estimates of $88.3 million.

Shares fell more than 15% to $23.95 in Friday pre-market trading.

Applied Optoelectronics provides fiber-optic access network products, like optical modules and lasers, to internet service providers, data center operators, cable television and telecom equipment manufacturers.

The company found a problem with a portion of its 25G lasers and had suspended shipments of certain transceivers that use those lasers.

“We believe that our customers appreciate our willingness to thoroughly resolve any issues, even at the expense of a delay in our revenue, and we believe that we continue to have strong relationships with our customers,” said CEO Thompson Lin in the company’s press release.

Applied Optoelectronics found that less than 1% of the lasers were affected.

After coming to a solution with its customer, shipments of the products have resumed.

Story by ProactiveInvestors