Finisar (FNSR) - Get Report shares tumbled 9% Friday after it treated investors to a triple whammy of missed targets, lowered guidance and a stock option-related restatement.

The Sunnyvale, Calif., optical networking systems shop said Thursday that

sales were light in the fiscal second quarter ended Oct. 28, and that sequential revenue growth would be nearly flat in the current quarter.

Sales in the fiscal second quarter were $108 million, below the $110 million analysts had anticipated. And Finisar's projections for revenue of $110 million in the fiscal third quarter were well below the $114 million consensus estimate.

The dim outlook not only surprised investors, it also dragged down other stocks in the optical networking sector Friday.

Outfits like

Avanex

( AVNX) fell 7 cents to $1.90,

JDSU

(JDSU)

was down 40 cents to $18.08 and

Bookham

( BKHM) slipped 9 cents to $3.94 in mid-day trading Friday.

Some fans suggest that investors brace for a bit of a bumpy ride until business stabilizes and the stock option inquiry is a little more in the rearview mirror.

"We believe Finisar shares will likely continue to be range bound in the $3 to $4 band over the coming quarters until sustainable margin expansion can be exhibited and the options investigation cloud lifts," CIBC analyst Jeff Osborne wrote in a research note Friday.

Osborne rates Finisar a buy and, noting a few immediately pressing concerns, remains optimistic about the longer-term prospects for the optical shop.

"We continue to see Finisar as a solid investment opportunity in the back half of 2007. However, product transition issues, excess customer inventory, and the recently announced options investigation will likely dampen near-term investor enthusiasm."

The news came as big networker

Nortel

( NT) executed a

reverse stock split and the spanking new

Alcatel-Lucent

(ALU)

began trading.

Finisar shares fell 33 cents to $3.50 Friday.