3 December 2010

Finisar’s quarterly revenue up 16% to record $240.9m

For its fiscal second-quarter 2011 (to end-October 2010), fiber-optic communications component and subsystem maker Finisar Corp of Sunnyvale, CA, USA has reported another revenue record for continuing operations of $240.9m, up 15.9% on $207.9m last quarter and up 65.3% on $145.7m a year ago (and above September’s guidance of $215–230m).

“The market environment continued to be very strong for Finisar, driven by increased demand for a broad range of LAN/SAN and metro/telecom products,” says CEO Eitan Gertel. “The company continued to gain market share, including in the WSS/ROADM line-card segment,” he adds.

Of the $33m increase in revenue from last quarter, sales fell $0.7m (15.6%) for products for analog and cable TV applications, but rose $12.1m (15.4%) for less than 10Gbps products, $13.3m (14.1%) for 10Gbps or faster products, and $8.3m (27.3%) for reconfigurable optical add-drop multiplexer (ROADM)-related products, including wavelength selective switches (WSS).

On a non-GAAP basis, gross margin has risen further, to 35.5% from 35.2% last quarter (due mainly to a favorable shift in product mix) and 29.6% a year ago (due to a reduction in manufacturing unit costs from higher shipment volumes).

Operating expenses as a percent of revenue have been cut from 23.5% a year ago and 21.3% last quarter to 18.5%, due mainly to revenue growing faster than expenses. Non-GAAP operating income has risen from $8.9m (6.1% of revenue) a year ago and $29m (14% of revenue) last quarter to a record $40.9m (17% of revenue, exceeding September’s guidance of 14–15%).

“We reached our previously announced target for non-GAAP operating margin of 17%, upwardly revised just last quarter, substantially earlier than we had predicted,” says executive chairman Jerry Rawls. “Achieving this level of operating margin was driven by our strong revenue growth combined with minimal increases in operating expenses,” he adds. “We achieved new company records for quarterly revenues, operating income and net income.”

Non-GAAP net income has risen from $7.5m a year ago and $25.8m last quarter to $38.3m. Non-GAAP EBITDA rose to $49.5m, up from $37.3m last quarter and more than triple the $16m a year ago.

After working capital adjustments and capital expenditure ($13.4m, up from $12.1m last quarter and $7.6m a year ago), cash generated totaled $18m.

During the quarter the firm received $11.3m in cash (net of related legal fees) under a settlement and cross-license agreement with Source Photonics Inc, resolving a lawsuit claiming infringement of Finisar patents. Finisar also paid $29.6m in cash to retire convertible subordinated notes that matured on 15 October and made scheduled principal payments of an additional $1m on its Malaysian debt. Finally, the firm used $5.9m in cash to make a strategic minority investment in a small optoelectronics company. In total, cash and cash equivalents fell during the quarter from $192.2m to $184.9m.

For its fiscal third-quarter 2011 (to end January), Finisar expects revenue to rise to $247–262m (including revenue for WSS/ROADM line-cards growing another 20–30% sequentially). Non-GAAP operating margin should be at least 17%.

See related items:

Finisar’s fifth quarter of double-digit growth yields record revenue of $207.9m

Finisar’s quarterly revenue rises 12.9% to record $188.5m

Finisar grows 32.4% year-on-year

Finisar’s capacity constraints suppress profit margin despite upturn

Tags: Finisar

Visit: www.finisar.com