Calling the Bottom? Finisar Reports Poor Results and Guidance; Stock Rises

Finisar

released its fiscal fourth-quarter earnings results after the closing bell on Monday. Ahead of the report, FNSR shares cratered during regular trading, closing down 9.48% amid a broad-based market sell-off. The company reported net income attributable to the company of $13.2 million or $0.14 per share, compared to $13.2 million $0.14 per share, in the year ago period. On an adjusted basis, which is comparable to analysts' consensus, the company reported net income of $20.2 million or $0.21 per share, compared to $32.1 million or $0.33 per share, last year. This was in line with Wall Street analysts' consensus EPS estimates of $0.21. Sales in the quarter were $239.1 million versus $236.9 million in last year's fourth-quarter. This missed Street consensus revenue estimates of $242.62 million. Looking ahead to the first-quarter, FNSR said it expects adjusted EPS between $0.11 to $0.15 on revenues of $218 million to $233 million. This compares to current consensus estimates of $0.24 per share on revenues of $250.37 million. Overall, the results and the guidance were quite poor. After initially trading down, however, the stock began to rise in Monday's after hours session. The small after-hours rally has continued on Tuesday, with FNSR shares closing up 3.41% to $13.93 on heavy volume. The reaction in the stock despite the terrible results is likely a result of the big sell-off yesterday, before the company released its quarterly results, in combination with bargain hunting on the part of investors. The shares have fallen more than 23% over the last year and are trading at the bottom of their 52-week range. When a stock rises on heavy volume despite bad news, it frequently is an inflection point. Finisar may be a name to watch going forward as the stock could have bottomed out yesterday and may move higher in the near-term.