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Viavi posts 7.4% drop in revenue, $5 million net loss

Viavi revenue Q1 fiscal 2018Viavi has posted revenue of $195.2 million (–7.4 percent) with net loss of $4.8 million (net income of $78 million) in its first fiscal quarter ended September 30, 2017.

Viavi generated revenue of $111.8 million (–5.7 percent) from Network Enablement, $29 million (–20.3 percent) from Service Enablement and $54.4 million (–2.5 percent) from Optical Security and Performance Products.

Viavi said 49.6 percent of its total revenue came from Americas, 19.4 percent from Asia Pacific and 31 percent from EMEA customers for the quarter ended September 30, 2017.

Network Enablement

Viavi said Network Enablement revenue dropped 5.7 percent due to decrease in Lab and Production partially offset by growth in Field Instruments, primarily driven by cable products.

Viavi’s Network Enablement business achieved gross margin of 63.1 percent down 220 basis points as a result of lower revenue volume and unfavorable product mix.

Service Enablement

Viavi said Service Enablement revenue fell 20.3 percent due to division’s restructuring to discontinue unprofitable product lines and declines in Mature Assurance products. Gross margin at 70.7 percent increased 1,220 basis points due to SE’s restructuring plan resulting in improved quality of revenue and gross margin.

Optical Security and Performance Products

Viavi said Optical Security and Performance Products revenue decreased 2.5 percent driven by lower Consumer and Industrial products. Its gross margin at 57.7 percent increased 110 basis points due to favorable product mix. Operating margin decreased 110 basis points due to lower revenue volume and higher operating expenses.
Viavi SCSI Storage Network TestingViavi, a leading test and measurement company, achieved operating margin of 5.1 percent, up 30 bps year-over-year.

Viavi CEO Oleg Khaykin said: “The results were helped by better than expected NSE instruments demand. Along with strong results from OSP, Viavi delivered non-GAAP EPS at $0.11 and exceeded the $0.06 to $0.09 guidance range.”

Viavi’s guidance for fiscal Q2 is cautious due to weaker than expected OSP outlook. The 3D Sensing product ramp in fiscal Q2 is expected to be more than offset by lower demand in OSP’s core product lines. In addition, OSP margins are expected to see a further negative drag due to the production stoppage related to the Sonoma County wildfires.

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