Shares of Acacia Communications (ACIA) are sliding in early trading after two of the company's top customers, ZTE (ZTCOF) and ADVA Optical (ADVOF) reported their Q3 results. ZTE, which was Acacia's top customer in the first half of this year, particularly warned that it sees the telecommunications industry as being "under pressure."

WHAT'S NEW: ZTE Corporation, a Chinese provider of telecommunications, enterprise and consumer technology solutions, announced its Q3 results, reporting that for the nine months ended September 30 its operating revenue grew 4.44% on a year-on-year basis. In its press release, ZTE said that global average macro-economic values are "still weak" and that, as a whole, it sees the telecommunications industry as "under pressure." "In addition, 'Internet+' is significantly affecting the format and mode of all kinds of businesses, triggering the upgrade of traditional industries and services," ZTE stated. Ricky Lai, an analyst at Guotai Junan International, was quoted by the Nikkei as saying that ZTE has enjoyed strong demand for networking equipment as telecommunication carriers were constructing base stations for 4G networks, but that demand is fading as most implementation have been completed globally. ADVA Optical Networking, another of Acacia's top customers, reported 30.4% year-on-year growth in its revenues in its third quarter. ADVA Optical CEO Brian Protiva struck a more optimistic tone than ZTE, stating "Our markets continue to have multiple growth drivers. Cloud and mobility are fueling the demand for more bandwidth and reshaping our industry around the data center paradigm." In terms of Q4, ADVA Optical guided to revenues to range between EUR 125M and EUR 140M, which would be a sequential decline even at the high end from the EUR 159.5M posted in Q3.

WHAT'S NOTABLE: In regulatory filings, Acacia has previously said it depends on a "limited number of customers for a significant percentage" of its revenue. In the six months ended June 30, 2016, ZTE accounted for 37.9% of Acacia's revenue and ADVA Optical accounted for 23.6% in that same period.

PRICE ACTION: In early trading, Acacia Communications shares have fallen about 10% to $78.86.