Fiber-optic equipment maker Finisar Corp. (FNSR: Quote), Monday reported a lower profit for the fourth quarter, as weak margins offset growth in revenues. Earnings for the quarter came in line with analysts' expectations, while revenues fell short of estimates. Moving ahead, the company detailed a weak outlook for the first quarter, below Street's current expectations.
For the recent few quarters, Sunnyvale, California-based Finisar has been reporting lower profits, as higher sales have been eroded by weak margins. Gross margin for the quarter dropped to 27.3 percent from 31.6 percent last year.
Finisar, which makes components used in fiber optic switches, said its fourth-quarter revenues grew to $239.1 million from $236.9 million last year. However, the revenues fell short of analysts' estimate of $242.62 million.
"Continued strength in datacom revenues were offset by lower telecom revenues. The lower telecom revenues were primarily the result of sluggish carrier capital expenditures and the full three month impact of annual price reductions for telecom products," said Jerry Rawls, Finisar's executive Chairman of the Board.
Finisar's fourth-quarter net income dropped $13.2 million or $0.14 per share from $16.4 million or $0.17 per share last year.
On an adjusted basis, net income declined to $0.21 per share from $0.33 per share last year. On average, ten analysts polled by Thomson Reuters expected earnings of $0.21 per share for the quarter. Analysts' estimates typically exclude special items.
Chief Executive Eitan Gertel said, "We continued to invest in research and development and make good progress on a number of new innovative products..."
However, Gertel warned that the current level of capital expenses has "muted" the near term revenue impact of the new products, but said "...this progress has set a strong foundation for revenue growth in the second half of 2012 and beyond."
Looking forward to the first quarter, the company expects adjusted earnings in a range of about $0.11 to $0.15 per share and revenues of $218 million to $233 million. Analysts currently estimate earnings of $0.24 per share on revenues of $250.37 million.
FNSR closed Monday's trading at $13.47, down $1.41 or 9.48% on a volume of 5.3 million shares. In after-hours, the stock gained $0.23 or 1.71%.
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by RTT Staff Writer
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