Finisar Shares Tumble +23% On Earnings Miss, Weak Guidance

Shares of Finisar FNSR are down 23 percent in pre-market trading following disappointing fourth quarter earnings and weak profit forecast.

In the company's press release on Thursday, Finisar's CEO Eitan Gertal commented, "Demand for transceivers operating at 10Gb/s and faster continued to be strong during the quarter. Demand was also strong for our transceivers for LTE wireless applications. We continue to develop and release new products, which we expect will enable Finisar to expand our market share and continue to grow revenue."

Fourth Quarter Results

The company reported fourth quarter EPS of $0.36 versus the estimated $0.38, missing by $0.02. EPS were up 80 percent from the same quarter last year

• Revenue came in at $306.0M versus the estimated $303.92M.
• Sales were Up 26 percent year over year.
• Management reported that Non-GAAP operating expenses were $65,931 versus $63,209 from the third quarter.
• Non-GAAP operating income fell $7.4 million to $38.9 million. This represents 12.7 percent of revenues, compared to $46.3 million, or 15.7 percent of revenues, in the third quarter.

Fiscal Year Results

Finisar reported that revenues increased 23.8 percent from the preceding year to $1,156.8 million.

• Datacom applications product sales increased 39.1 percent from FY2013.
• Telecom applications product sales fell 2.5 percent, or $8.6 million, compared to the prior fiscal year.
• Non-GAAP gross margin increased to 35.9 percent from 30.9 percent in the preceding year.
• Non-GAAP operating income increased to $162.3 million, or 14 percent of revenues. Operating income represented seven percent of revenues, in fiscal 2013.

Guidance

Finisar sees Q1 EPS of $0.30-0.40, versus the $0.41 analyst estimate.

• The company expects sales of $320.0-335.0 million compared with the $316.96 million estimate.

Stock Action

Following the earnings and guidance report on Thursday, shares tumbled 22.46 percent to $19.58 in the after-hours trading session.

In Friday's pre-market trading, the stock saw a spike to $25.245 before collapsing to $19.35, down more than 23 percent from Thursday's close. Shares rose above $20.00 before continuing its descent.