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Lumentum closes datacom module business sale to CIG

Lumentum Holdings Inc. says it has closed its previously announced sale of the datacom optical module lines that were part of Oclaro Japan to Cambridge Industries Group (CIG; see "Lumentum to sell certain Oclaro Japan optical transceiver lines to Cambridge Industries Group" ). The company reiterated that the sale was part of a strategy to stop selling datacom optical transceivers. Lumentum says its remaining datacom optical transceiver line will be phased out over the next 12 to 18 months. Financial terms of the deal were not disclosed.

The sale was consummated after Lumentum closed its fiscal third quarter March 20, so revenues from the Datacom business unit reported for the quarter will include sales of the affected optical modules. The company had forecasted revenues for the business unit at $50 million to $55 million. With the sale closed, Lumentum says it expects revenues for the unit to decline by approximately $20 million to $25 million in the fiscal fourth quarter. The missing modules will account for $20 million of the decline, with another approximately $5 million coming from reductions in sales of its remaining datacom transceivers. In addition to the transceivers from Oclaro Japan, acquired along with the rest of Oclaro last xxxx, and its internally developed datacom transceivers, the Datacom unit also includes optical components for datacom applications. Lumentum plans to focus on sales of these components as the centerpiece of its strategy to serve datacom-related requirements going forward. Lumentum President and CEO Alan Lowe discussed this strategy in a video interview at OFC 2019.

"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 data center 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."