Business Corpus: Apple Supplier Hints At Greater 3D-Sensing iPhone ProductionApple's key supplier of augmented-reality vision components for the iPhone X reported better-than-expected June-quarter results, which implied a quicker ramp up of next-generation iPhones. The post Apple Supplier Hints At Greater 3D-Sensing iPhone Production appeared first on Investor's Business Daily.

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Apple's (AAPL) key supplier of augmented-reality vision components for the iPhone X on Wednesday reported better-than-expected June-quarter results, which implied a quicker ramp up of next-generation iPhones.

Lumentum Holdings (LITE) said a sooner-than-anticipated acceleration in its AR/3D-sensing business drove upside in its fiscal fourth-quarter results.

Lumentum is Apple's primary supplier of vertical-cavity surface-emitting laser (VCSEL) components for the iPhone X with about a 75% market share. The sensor works in the front-facing camera of the iPhone X. It provides 3D sensing and enables facial recognition and the Animoji app.

Milpitas, Calif.-based Lumentum last quarter began shipping higher volumes of the smartphone component to key customers, including Apple. Shipments exceeded expectations, management said.

"More importantly, the company continues to anticipate order volume to significantly accelerate in the September and December quarters," Gene Munster, Loup Ventures managing partner, said in a report. "While the company announced new 3D sensing wins with Android manufacturers, we believe a high percentage of these orders were secured by Apple."

3D Sensing In iPhone

Given the increase in VCSEL shipments, Munster expects Apple to offer three new iPhone models with 3D sensing for augmented reality, up from just one today.

That should provide a boost to the iPhone's average selling prices because of the higher bill of materials from the component, Munster said.

"Lumentum results and guidance are evidence that Apple continues to be committed to augmented reality," Munster said. "We anticipate 3D sensing will only be front-facing on the new iPhones and believe Apple will be incorporating this technology in new product categories such as the iPad."

Lumentum earned an adjusted 95 cents a share on sales of $301 million in its fiscal fourth quarter ended June 30. Analysts expected it to earn 65 cents a share on sales of $288 million. On a year-over-year basis, earnings per share rose 144% and sales climbed 35%.

For the current quarter, it expects to earn an adjusted $1 a share on sales of $350 million. Analysts expected it to earn 94 cents a share on sales of $337 million.

Lumentum makes optical and photonic products for optical networking and commercial laser customers worldwide. Telecom, enterprise and data center networks use its optical components and subsystems. Lumentum's commercial lasers enable advanced manufacturing techniques and applications. That includes next-generation 3D sensing capabilities.

Shares of Lumentum fell 2%, near 56.70, in afternoon trading on the stock market today.

Applied Optoelectronics Jumps On Earnings Report

Meanwhile, rival optical component supplier Applied Optoelectronics (AAOI) late Tuesday beat expectations for the second quarter, sending its stock higher.

The Sugar Land, Texas-based company earned 64 cents a share on sales of $87.8 million in the June quarter. Analysts expected it to earn 45 cents a share on sales of $77.8 million. On a year-over-year basis, earnings per share fell 58% while sales dropped 25%.

Healthy sales of optical networking gear for cloud data centers boosted results for Applied Optoelectronics last quarter. Facebook (FB) was Applied Opto's biggest data center customer last quarter. But Applied Opto also got sizable business from Amazon.com (AMZN) and Microsoft (MSFT), Piper Jaffray analyst Troy Jensen said in a report to clients.

Applied Opto stock surged 11% to 41.40 on Wednesday.

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