Why Acacia Communications, Inc. Dropped 10% in October
Stock in high-speed optical interconnect technology manufacturer Acacia Communications, Inc. (NASDAQ: ACIA) fell 10.2% last month, according to data from S&P Global Intelligence.
As I discussed this summer in an article on one of Acacia's competitors, Oclaro, Inc. (NASDAQ: OCLR), demand from China for optical network infrastructure products has declined in 2017. Last month, Acacia shares came under pressure as investors fretted over this reduced demand, as well as the potential lingering effects of a quality issue that delayed Acacia's product shipments during the second quarter of 2017.
Indeed, the company's third-quarter 2017 earnings, released on Nov. 2, revealed that revenue decreased 22% to $46.1 million versus the prior year, and that net income plunged 47% to $18.5 million. Investors were prepared for these numbers, and in fact the top- and bottom-line results were within guided expectations. More significantly, however, while Acacia made progress on its quality issue, visibility into Chinese demand hasn't improved much.
Source: Fool.com
