Finisar third fiscal quarter results bring more good news

March 8, 2013
Finisar Corp. (NASDAQ: FNSR) yesterday became the second optical communications technology company to present a rosy revenue picture. The optical components and subsystems vendor announced revenues in the middle of its previous guidance for the quarter ended January 27, 2013, and indicated the current quarter should be equally lucrative if not more so.

Finisar Corp. (NASDAQ: FNSR) yesterday became the second optical communications technology company to present a rosy revenue picture. The optical components and subsystems vendor announced revenues in the middle of its previous guidance for the quarter ended January 27, 2013, and indicated the current quarter should be equally lucrative if not more so.

Coming on the heels of Ciena Corp.’s (NASDAQ: CIEN) surprisingly good results over the same timeframe (see “Ciena first quarter 2013 revenue, EPS beat Street”), Finisar’s results may indicate that the optical communications market may move on steadier legs through the first half of this year than it did in 2012.

"I am pleased to report fiscal third quarter revenues of $238.4 million, which is $6.3 million, or 2.7%, greater than the prior quarter. Our growth in revenues came primarily from sales of 10G and 100G transceivers and transponders for datacom applications," said Jerry Rawls, Finisar's executive chairman of the board, via a press release.

GAAP gross margins for the quarter also improved sequentially, from 27.5% to 28.5%. However, the company did report a GAAP net loss of $3.4 million ($0.4 per share) for the quarter, after a profit of $271,000 for the fiscal second quarter. Operating expenses for the third quarter rose slightly more than $5 million sequentially, which helped account for the loss.

"During the quarter, we continued to invest significantly in technology and product development and made substantial progress on a number of new products for our datacom and telecom products lines. We are planning several compelling product announcements at the OFC show during the week of March 18th in Anaheim, California," said Eitan Gertel, Finisar's CEO, in the same release.

In conference call with analysts yesterday, Gertel revealed that Finisar had shipped “a number” of its 100-Gbps coherent transponders and that customer feedback has been “very positive.” The company also has shipped initial quantities of its CFP2 optical transceivers, he said.

Looking forward to the fiscal fourth quarter, Finisar management said they expect revenues in the range of $235 million to $250 million. GAAP operating margin should be approximately 2%, while non-GAAP operating margin will come in at around 7%. Non-GAAP earnings per diluted share will range between approximately $0.15 and $0.19.

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