9 March 2011

Finisar grows 57.6% year-on-year to record quarterly revenue of $263m

For its fiscal third-quarter 2011 (to end January), fiber-optic communications component and subsystem maker Finisar Corp of Sunnyvale, CA, USA has reported another revenue record for continuing operations of $263m, exceeding the guidance of $247–262m (and up 9.2% on $240.9m last quarter and 57.6% on $167m a year ago).

Growth was driven primarily by demand for 40Gbps transponders, wavelength selective switches (WSS) and reconfigurable optical add-drop multiplexer (ROADM) line-cards. Of the $22.1m increase in revenue from last quarter, sales rose just $0.3m (7.4%) for products for analog and cable TV applications and $2.6m (2.8%) for less than 10Gbps products, but as much as $10.4m (9.7%) for 10Gbps or faster products and $8.8m (22.7%) for WSS/ROADM line-card products.

“We achieved new company records for quarterly revenues, non-GAAP operating income and non-GAAP net income during the quarter,” says CEO Eitan Gertel.

On a non-GAAP basis, gross margin rose from 32.2% a year ago to 34.7%, reflecting a favorable shift in product mix and a reduction in manufacturing unit costs due to higher shipment volumes. However, this is down on 35.5% last quarter as a result of unexpected under-utilization in the vertical-cavity surface-emitting laser (VCSEL) fabrication facility in Allen, TX due to a shortage of wafer availability.

Non-GAAP operating expenses have risen from $39.7m a year ago and $44.6m last quarter to $46.4m, but fallen as a percent of revenue from 23.8% a year ago and 18.5% last quarter to 17.7%, due mainly to revenue growing faster than expenses. Operating income has hence risen from $14.2m (8.5% of revenue) a year ago and $40.9m (17% of revenue) last quarter to $44.7m (17% of revenue). Net income has risen from $11.5m a year ago and $38.3m last quarter to $42.5m.

On 27 December, Finisar raised net proceeds of $117.9m from a common stock offering. Also during the quarter, Finisar repaid $17.3m of bank debt associated with its Asian subsidiaries. So despite this, plus capital expenditure of $19m (up from $13.4m last quarter), cash and cash equivalents rose from $184.9m to $310.2m.

However, Finisar says that, during fiscal fourth-quarter 2011 (to end April), it will be impacted by the full three months of the annual price negotiations with telecom customers that typically take effect on 1 January, the 10-day-long shutdown at certain customers for Chinese New Year in February, the adjustment of inventory levels at some telecom customers (particularly for products that had previously been on allocation and long lead times, including WSS and ROADM line-cards), and a slowdown in business in China overall. The firm hence expects a drop in revenue to $235–250m, and in non-GAAP operating margin to 13–15%.

“We continue to execute on our new product development programs, including tunable XFP, to generate a significant pipeline of products, which we expect will enable us to win new opportunities with customers and expand our market share,” says Gertel.

See related items:

Finisar’s quarterly revenue up 16% to record $240.9m

Finisar’s fifth quarter of double-digit growth yields record revenue of $207.9m

Finisar’s quarterly revenue rises 12.9% to record $188.5m

Finisar grows 32.4% year-on-year

Tags: Finisar

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