Viavi Solutions Inc. (NASDAQ:VIAV) Q3 2020 Earnings Conference Call - Final Transcript
May 06, 2020 • 04:30 pm ET
Ladies and gentlemen, thank you for standing by, and welcome to the Viavi Solutions Third Quarter 2020 Earnings Call. At this time, all participants are in listen-only mode. After the speakers presentation, there will be a Question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded.
I would now like to hand the conference over to your speaker today Bill Ong, Head of Investor Relations. Please go ahead, sir.
Thank you. Welcome to Viavi Solutions Third Quarter Fiscal Year 2020 Earnings Call. My name is Bill Ong, Head of Investor Relations. Joining me on today's call are Oleg Khaykin, President and CEO and Amar Maletira, CFO. Please note this call will include forward-looking statements about the company's financial performance. These statements are subject to risks and uncertainties that could cause actual results to differ materially from our current expectations and estimations.
We encourage you to review our most recent annual report and SEC filings, particularly the risk factors described in those filings. The forward-looking statements, including guidance we provide during this call are valid only as of today. Viavi undertakes no obligation to update these statements. Please also note that unless we state otherwise all results except revenue are non-GAAP. We reconcile these non-GAAP results to our preliminary GAAP financials and discuss their usefulness and limitations in today's earnings release.
The release, plus our supplemental earnings slides which includes historical financial tables are available on Viavi's website. Finally, we are recording today's call and we'll make the recording available by 4.30 PM Pacific Time this evening on our website. I would now like to turn the call over to Amar.
Thank you, Bill. Our fiscal Q3 was a challenging quarter for Viavi as the COVID-19 pandemic impacted all businesses around the globe. Fiscal Q3 revenue at $256.2 million declined 3.4% year-on-year and was below the guidance range of $268 million to $288 million. NSE was below the guidance range, while OSP exceeded the range.
Viavi's operating margins at 14.8% increased 10 basis points year-on-year and were within the guidance range of 14.5% to 16.5%. EPS at $0.14 reached the guidance midpoint of $0.13 to $0.15 and was up by a $0.01 from a year ago. Now moving to our reported Q3 results by business segments, starting with NSE. NSE revenue at $187 million declined 9% year-on-year and was below the guidance range of $204 million to $220 million.
Our missed revenue guidance was largely a result of COVID-19 lock down. Within NSE, any revenue at $163.9 million was down 9.2% from a year ago, primarily due to declines in the mature access and cable field instruments. While lab instruments across both wireless and optical combined was roughly flat. SE revenue at $23.1 million declined 7.2% from a year ago, primarily due to weakness in our mature assurance products. While our growth products with NSE were roughly flat.
NSE gross margins at 64.2% increased 20 basis points year-on-year. Within NSE, any gross margin at 63.6% declined 60 basis points