Viavi Solutions Q2 Results Exceed Expectations, Analysts Bullish
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1d ago
0mins
Source: seekingalpha
- Earnings Beat: Viavi Solutions reported fiscal Q2 results that exceeded expectations, with revenue and EPS beating consensus estimates by 1% and $0.03 respectively, leading to a premarket stock increase of about 7%.
- Positive Outlook: The company guided Q3 revenue well above consensus by 11% and $0.08, with data center business expected to sustain approximately 20% growth, enhancing its competitive position in the market.
- Restructuring Plan: On January 23, Viavi approved a restructuring plan affecting about 5% of its global workforce, which is expected to incur total charges of around $32 million, primarily related to employee severance and associated costs.
- Cost Savings Anticipation: Upon completion of the restructuring, Viavi expects to achieve annualized cost savings of approximately $30 million, which will contribute to improving the company's profitability and long-term financial health.
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Analyst Views on VIAV
Wall Street analysts forecast VIAV stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for VIAV is 19.56 USD with a low forecast of 17.00 USD and a high forecast of 23.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
9 Analyst Rating
8 Buy
1 Hold
0 Sell
Strong Buy
Current: 24.700
Low
17.00
Averages
19.56
High
23.00
Current: 24.700
Low
17.00
Averages
19.56
High
23.00
About VIAV
Viavi Solutions Inc. is a global provider of network test, monitoring and assurance solutions for telecommunications, cloud, enterprises, first responders, military, aerospace and railway. The Company's segments include Network and Service Enablement (NSE) and Optical Security and Performance Products (OSP). The NSE segment provides an integrated portfolio of testing solutions that access the network to perform build-out and maintenance tasks. Its solutions address lab and production environments, network management, service assurance and artificial intelligence for IT operations (AIOps) for any kind of network, including wireless, wireline, cloud, satellite, public safety, military and critical infrastructure. The OSP segment leverages its core optical coating technologies and volume manufacturing capability to design, manufacture and sell technologies for the anti-counterfeiting, three-dimensional (3D) sensing, government and aerospace, automotive and industrial markets.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Viavi Solutions Reports Strong Q2 2026 Earnings with Growth Momentum
- Significant Revenue Growth: Viavi Solutions reported net revenue of $369.3 million for Q2, exceeding the high end of guidance, reflecting a 23.5% sequential increase and a 36.4% year-over-year growth, driven by strong demand in data center and defense markets.
- Earnings Per Share Beat: The EPS of $0.22 surpassed the high end of guidance at $0.20, marking a $0.07 sequential increase, indicating sustained profitability and enhanced market confidence.
- Restructuring Plan Implementation: The company plans to impact approximately 5% of its global workforce, with estimated restructuring charges of $32 million and annual savings of about $30 million, which will be reinvested into high-growth areas to further drive business development.
- Optimistic Outlook: The CFO guided for Q3 revenue between $386 million and $400 million, showcasing the company's confidence in future growth, particularly with the ongoing strong demand in the data center ecosystem.
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Viavi Solutions Soars on Restructuring Initiative Driving Record Highs
- Record High Stock Price: Viavi Solutions' stock surged to $24.95 during intra-day trading on Thursday, closing at $24.70 with a 17.45% increase, marking the highest level since 2002, reflecting strong investor confidence in the company's restructuring initiative.
- Restructuring Implementation: The company announced a 5% global workforce reduction and aims to complete the restructuring by June 2026, expecting to save $30 million despite incurring $32 million in related expenses, which is intended to enhance operational efficiency and optimize resource allocation.
- Financial Performance Fluctuations: Despite a 36% year-over-year revenue increase to $369.3 million in the second quarter, the company reported a net loss of $48.1 million, highlighting financial pressures prior to restructuring and indicating both challenges and opportunities during the transformation process.
- Six-Month Performance Review: For the six-month period ending December 2025, Viavi Solutions recorded a net loss of $69.5 million, a stark contrast to a net income of $7.3 million in the same period last year, even as revenues grew by 31% to $668.4 million, illustrating the tension between growth and profitability.
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