Finisar Tops Profit View; Shares Jump

BY Michael Baron | 09/01/11 - 05:14 PM EDT

Stock quotes in this article: FNSR

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NEW YORK (TheStreet) -- Finisar (FNSR ) shares surged late Thursday after the optical communications equipment maker topped its earnings forecast for its latest quarter by keeping a lid on operating expenses.

The Sunnyvale, Calif.-based company reported a non-GAAP profit of $19.5 million, or 21 cents a share, for the three months ended in July on revenue of $228.2 million. The average estimate of analysts polled by Thomson Reuters was for earnings of 18 cents a share in the quarter on revenue of $228.4 million.

Finisar had projected earnings of 16 to 20 cents a share in its fiscal first quarter. The company said gross margins came in at 32.1%, above its expected range of 30.7% to 31.7%.

Operating expenses came in at $59.4 million, which was up sequentially but the company said the amount was lower than expected.

While the company did increase revenue by 10% year-over-year, it did post a decline of 3.7% on a sequential basis, which it attributed to "primarily driven by continued softness in demand from our telecom customers, particularly Chinese OEMs [original equipment manufacturers]."

The stock was last quoted at $20.14, up 8.3%, on volume of around 670,000, according to Nasdaq.com.

For its fiscal second quarter ending in October, Finisar said it sees non-GAAP earnings of 20 to 24 cents a share with revenue ranging from $235 million to $250 million. Wall Street's current consensus view is for a profit of 20 cents a share in the current quarter on revenue of $236.8 million.

Based on Thursday's regular session close at $18.59, Finisar shares were down nearly 38% so far in 2011, although the stock has bounced more than 50% since hitting a 52-week low of $12.26 in early August 2010.

--Written by Michael Baron in New York.

>To contact the writer of this article, click here: Michael Baron.

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