Lumentum Announces The Closing Of Datacom Product Line Sale To CIG
Lumentum, a provider of photonics products for optical networking and lasers for industrial and consumer markets, has announced the closing of its previously announced sale of certain datacom transceiver product lines to CIG. The transceiver product lines acquired by CIG were previously developed and manufactured by Lumentum's subsidiary Oclaro Japan. In connection with the closing of the transaction, Lumentum and CIG entered into a long-term supply agreement for Lumentum's photonic chips.
"The closing of the transaction with CIG is a key milestone in the shift in Lumentum's strategy to focus on photonic chips while continuing to participate in the anticipated large growth in datacom transceiver volumes driven by datacenter expansion and 5G wireless over the coming years," said Walter Jankovic, Lumentum's Senior Vice President and General Manager, Datacom. "We are highly focused on accelerating innovation at the photonic chip level and have a strong pipeline of new chip products."
As a result of the timing of the divestiture close, which occurred following the end of the fiscal third quarter, the divestiture will not impact Lumentum's financial results for the fiscal third quarter ended March 30, 2019. Lumentum expects revenue from datacom transceivers will decline in the fiscal fourth quarter relative to the fiscal third quarter by approximately $20 million to $25 million, with approximately $20 million of the decline related to the divestiture and an additional $5 million due to continuing declines in remaining datacom transceiver revenues. As part of the shift in Lumentum's datacom strategy to focus on photonic chips, it expects revenue from the remaining datacom transceiver product lines to decline to zero over the next 12-18 months. Lumentum will provide guidance ranges for its fiscal fourth quarter incorporating the changes in its datacom product lines in its fiscal third quarter earnings release and call on May 7, 2019.