Updated with latest information about after-hours trades. NEW YORK ( TheStreet) -- Shares of Finisar ( FNSR) were in freefall in after-hours action on Tuesday after the optical networker posted an in-line profit for its fiscal third quarter but gave a disappointing outlook for the current quarter that's well below analyst expectations. For the three months ended Jan. 30, Sunnyvale, Calif.-based Finisar posted a non-GAAP profit of $42.5 million, or 47 cents a share, on revenue of $263 million. That performance compared to an average estimate of analysts polled by Thomson Reuters for earnings of 47 cents a share in the January period on revenue of $257.9 million.
For its fiscal fourth quarter ending in April, however, Finisar is forecasting a non-GAAP profit of 31 to 35 cents a share on revenue of $235 million to $250 million. The current average analysts' view calls for earnings of 48 cents a share on revenue of $257.9 million. The company gave a laundry list of reasons for the weak outlook, including the quarter feeling the full impact of its annual price negotiations with telecom customers that take effect at the start of the year, an overall slowdown in business in China that was compounded by a 10-day shutdown for certain customers because of the Chinese New Year in February, and the "adjustment of inventory levels" by certain customers. Finisar said the inventory adjustments particularly impacted products that were on allocation and have long lead times, including WSS and ROADM line cards. The stock was last quoted at $25.77, down 36%, on volume of more than 2 million, according to Nasdaq.com. Based on Tuesday's regular session close at $40.04, the shares were up more than 200% over the past year, hitting a 52-week high of $46.09 on Feb. 14, and were looking to be priced for perfection trading with a trailing price-to-earnings ratio of 42X. Shares of the optical networkers were hit hard on Monday after Ciena ( CIEN) posted blowout results for its fiscal first-quarter but gave a gloomy outlook for its April-ending quarter, forecasting revenue of between $415 million and $435 million and adjusted gross margins in the low 40s. Wall Street had been looking for revenue of $438 million for the quarter.