Finisar’s quarterly revenue growth in WSS and VCSEL arrays for 3D applications offset by fall in sales of 10G-and-lower transceivers

For its fiscal third-quarter 2019 (ended 27 January), fiber-optic communications component and subsystem maker Finisar Corp of Sunnyvale, CA, USA has reported revenue of $327.6m, down 1.4% on $332.4m a year ago but up 0.7% on $325.4m last quarter, due to increased sales of wavelength-selective switches (WSS) and vertical-cavity surface-emitting laser (VCSEL) arrays for 3D applications, offset partially by a decline in sales of 10G-and-lower transceivers.

“Revenues again grew over the prior quarter and gross margins also improved over the prior quarter, primarily due to favorable product mix and continued focus on reducing manufacturing overhead,” says CEO Michael Hurlston. On a non-GAAP basis, gross margin was 30.2%, up from 28.3% last quarter and 28.6% a year ago.

Operating expenses (OpEx) were level with last quarter (19.5% of revenue) but cut by $9m from a year ago (21.8% of revenue). This was despite facility start-up costs rising further, from just $0.6m a year ago and $11.4m last quarter to $15.1m, aided by R&D expenses being cut further, from $59.9m a year ago and $52.7m last quarter to $51.3m.

“The combination of the above resulted in significant improvement in operating margins and profitability,” notes Hurlston.

Operating income rose further, from $22.7m (operating margin of 6.8% of revenue) a year ago and $28.6m (8.8% margin) last quarter to $35.2m (10.8% margin).

Likewise, net income has risen further, from $22.8m ($0.20 per diluted share) a year ago and $30.6m ($0.26 per diluted share) last quarter to $34.2m ($0.29 per diluted share).

During the quarter, the firm redeemed about $257.7m of convertible notes. Overall, cash, cash equivalents and short-term investments hence fell by $186.5m, from $1197.1m to $1010.6m.

Due to its proposed acquisition by engineered materials and optoelectronic component maker II-VI Inc of Saxonburg, PA, USA (announced on 9 November), Finisar has not provided forward guidance for fiscal fourth-quarter 2019.

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Tags: Optical communications Finisar

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