DECEMBER 2, 2010 -- Having pre-announced expectations for revenue and profitability records for the quarter, Finisar Corp. (NASDAQ: FNSR) confirmed those expectations when it revealed financial results for its second quarter ended October 31, 2010. Finsar announced revenues of $240.9 million for the quarter, up 15.9% from the fiscal first quarter.
Operating income increased to $36.1 million, or 15.0% of revenues. Net income from continuing operations was $33.8 million, or $0.39 per diluted share. Gross margin increased to 34.2% from 34.1% in the preceding quarter and 27.3% in the second quarter of the prior year.
"In our just completed second quarter, we reached our previously announced target for non-GAAP operating margin of 17.0%, upwardly revised just last quarter, substantially earlier than we had predicted. Achieving this level of operating margin was driven by our strong revenue growth combined with minimal increases in operating expenses," said Jerry Rawls, Finisar's executive chairman of the board. "We achieved new company records for quarterly revenues, operating income, and net income."
"Furthermore, the market environment continued to be very strong for Finisar, driven by increased demand for a broad range of LAN/SAN and metro/telecom products," said Eitan Gertel, Finisar's CEO. "The company continued to gain market share, including in the WSS/ROADM line card segment where revenues grew 27.3% over the previous quarter. We expect revenues for WSS/ROADM line cards to grow another 20% to 30% sequentially in our fiscal third quarter."
Compared to the preceding quarter:
- the sale of 10 Gbps or faster products increased $13.3 million, or 14.1%
- the sale of less than 10 Gbps products increased $12.1 million, or 15.4%
- the sale of ROADM related products, including wavelength selective switches (WSS) increased $8.3 million, or 27.3%
- the sale of products for analog and cable television (CATV) applications decreased $0.7 million, or (15.6)%.
Finisar management indicated that they currently expect revenues for the company’s third fiscal quarter ending January 30, 2011 to be in the range of $247 to $262 million. On a GAAP basis, operating margin is expected to be greater than or equal to 14.0%. Additional non-cash and infrequently occurring charges and benefits excluded in calculating non-GAAP operating income are expected to total a net charge of approximately $7 to $8 million. As a result, on a non-GAAP basis, operating margin is expected to be greater than or equal to 17.0%. Non-GAAP earnings per diluted share is expected to be in the range of $0.45 to $0.47.
More details can be found on Finisar’s website.