Finisar Loss Widens, but Revenue Grows

By TSC Ratings

Fiber-optic subsystems maker Finisar(FNSR Quote) reported a higher net loss during the fiscal second quarter of 2009 due to impairment charges of $178.77 million and research and development costs of $10.50 million.

Net loss widened to $186.83 million or 44 cents per share from a year-earlier loss of $10.81 million or 4 cents per share. However, non-GAAP earnings surged to $10.35 million or 2 cents per share from $1.49 million or zero a year ago. The latest quarterly earnings missed the consensus estimate of 3 cents per share.

Finisar's revenue during the quarter grew 58.4% to $159.51 million from $100.7 million in the year-ago quarter, driven by growth across segments. Segmentwise, the Optical Subsystems and Components revenue spiked 62.5% to $147.75 million from $90.93 million, boosted by the acquisition of Optium Corp.

Within the segment, sales of products for 10/40 Gbps applications almost doubled to $54 million. At the same time, the Network Performance Test Systems segment revenue rose 20.4% to $11.76 million from $9.77 million in the prior year's quarter.

For the quarter ended October 2008, the company's gross profit margin dropped 139 basis points to 30.18% from 31.57%, as cost of revenue grew 63.5% to $109.86 million. Research and development expenses increased to $24.87 million from $17.63 million a year earlier, whereas general and administrative expenses declined marginally to $11.73 million from $11.91 million.

During the quarter under review, Finisar completed the acquisition of Optium, a fiber-optic network products manufacturer. The company also expanded its presence in China by establishing a new manufacturing and R&D facility, designed specifically for high-volume and cost-effective optics production. Recently, Finisar launched Quadwire, a 40 Gbps parallel active optical cable.

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