Viavi Solutions, a recent Leading Lights winner for its market leadership in several key test and measurement areas, has just upgraded its revenue and earnings guidance for its fiscal first quarter in the second of two surprise developments this week.

The company said it now expects preliminary fiscal Q1 2021 revenue to be in the range of $282 million to $284 million and non-GAAP earnings per share (EPS) to be in the range of $0.18 to $0.19.

"These preliminary results reach or exceed the high end of previously announced guidance of $258 million to $282 million, and $0.14 to $0.16, respectively," Viavi said.

The company is due to publish full financial results for its first fiscal quarter of 2021 on November 5. Its financial year runs to the end of June, meaning that the fiscal first quarter covers the period from July to end-September.

According to a research note from Briley Securities, "most of the upside surprise" was probably driven by Viavi's optical security and performance (OSP) products, while the network and service enablement (NSE) segment was mostly in line.

"For [fiscal Q2], we believe OSP will decline slightly [quarter on quarter], while NSE will increase as it continues to recover from [fiscal Q3 2020], resulting in [a] sales estimate of $288 million versus consensus of $287 million. We have raised our FY21 EPS estimate from $0.65 to $0.68, reflecting better-than-expected [fiscal Q1]; we have maintained our FY22 EPS estimate of $0.80," the analysts said.

CFO musical chairs

As it presented its more favorable guidance, Viavi also had to confess to losing its chief financial officer to Rackspace Technology, which had already announced the appointment of Amar Maletira as president and CFO with effect from November 23, replacing Dustin Semach.

For the time being, Viavi has appointed Pam Avent, currently its global controller, as interim CFO and is looking for a replacement. The company stressed that there is no dispute or disagreement with Maletira, who has agreed to an orderly transition of his duties, including a six-month consulting agreement with Viavi.

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It's not clear why Maletira jumped ship, but Rackspace was looking for an experienced hand following Semach's resignation.

For its part, Viavi seems to be getting back on track following difficult third and fourth quarters of fiscal 2020, when revenue fell by 3.4% and 8% respectively.

As noted by Briley Securities, the better-than-expected fiscal Q1 result "is the latest proof that the business environment continues to improve" as a result of "increased telecommuting driving higher network usage."

"We believe the company's catalysts consisting of 5G, optical fiber, and 3DS (55% of sales) will drive healthy revenue growth going forward as they continue to increase in terms of overall sales," the analysts said.

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— Anne Morris, contributing editor, special to Light Reading