3 September 2010


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

For its fiscal first-quarter 2011 (ended 1 August 2010), fiber-optic communications component and subsystem maker Finisar Corp of Sunnyvale, CA, USA has reported another revenue record for continuing operations of $207.9m, up 10.3% on $188.5m last quarter and up 61.5% on $128.7m a year ago (representing the fifth consecutive quarter of double-digit growth).


Of the $19.4m increase in revenue from last quarter, sales fell $0.2m (3.9%) for products for cable TV applications and $4.2m (5%) for products for applications less than 10Gbps, but rose $20.1m (27.2%) for products equal to or greater than 10Gbps and $3.6m (13.5%) for reconfigurable optical add-drop multiplexer (ROADM) products, as unit shipments of wavelength selective switch (WSS) products grew faster than higher-priced ROADM linecards containing a WSS. “The mix of WSS components and ROADM linecard business last quarter tends to mask the progress we made in terms of adding capacity as overall unit shipments increased by more than 25%,” comments CEO Eitan Gertel.

On a non-GAAP basis, gross margin has risen from 28.8% a year ago and 32.6% last quarter to a record 35.2%. This reflects a favorable shift in product mix (due to the growth in revenues from higher-speed products and ROADM-related products), along with the benefits of being vertically integrated, according to Gertel.

As a proportion of revenue, non-GAAP operating expenses have fallen from 26.2% a year ago and 22.9% last quarter to 21.3%, due mainly to revenue growth. Operating income has risen from $3.3m (an operating margin of 2.5% of revenue) a year ago and $18.3m (9.7% of revenue) last quarter to $29m (a record 14% of revenue). Non-GAAP net income has risen from just $1.8m a year ago and $16.7m last quarter to $25.8m.

“We reached our previous target financial model earlier than we had predicted,” says executive chairman Jerry Rawls. “We achieved company records for revenues, gross margin, operating margin and EPS [earnings per share],” he adds. “Furthermore, the demand environment continued to be very strong for us, particularly for our higher-data-rate transceivers and our ROADM products,” he adds. “As a sign of that ongoing strength, our book-to-bill ratio in the quarter continued to be above 1.0.”

Capital expenditure has continued to rise, from $3.1m a year ago and $10m last quarter to $12.1m. “Adding capacity continues to be a top priority for us next quarter, particularly for our ROADM products, where demand currently exceeds our ability to supply,” says Gertel. “We intend to add significant ROADM capacity again in the second quarter based on a number of initiatives that went into effect toward the end of last quarter,” he adds.

For fiscal second-quarter (to end-October 2010), Finisar expects revenue to rise a further 3–10% to $215–230m and non-GAAP operating margin to be 14–15%.

See related items:

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

Finisar’s revenue grows 20%, driven by 10-40Gb/s applications

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