5 December 2011

Finisar’s revenue grows 5.8% quarter-on-quarter to $241.5m

For its fiscal second-quarter 2012 (to end-October 2011), Finisar Corp has reported revenue of $241.5m, roughly level with $240.9m a year ago but up 5.8% on $228.2m last quarter. The increase is driven mainly by growth in sales of WSS/ROADM line-card products and tunable XFP transceiver products, as well as the consolidation of a full quarter of results from the Scandinavia-based subsidiary Ignis ASA (which provides optical components and network solutions for fiber-optic communications) acquired on 18 May.


Compared to last quarter, datacom product revenue fell by $0.6m (0.4%) but telecom product revenue rose by $13.8m (13.9%). "We continued to execute well on our product development plan and have delivered to customers a number of innovative products in the WSS and pluggable product lines,” says CEO Eitan Gertel. “Production of our tunable XFP transceiver products began to ramp during the second quarter of fiscal 2012,” he adds.

On a non-GAAP basis, gross margin was 32.1%, down from 35.5% a year ago but level with last quarter as the benefits of increased revenue were offset by consolidating a full quarter of financial results of Ignis, which has a lower average gross margin than Finisar’s overall corporate average.

Although down from $40.9m (operating margin of 17% of revenue) a year ago, operating income rebounded to $23.6m (9.8% margin), up from $20.9m (9.2% margin) last quarter as revenue grew faster than operating expenses (up from $44.6m a year ago and $52.4m last quarter to $53.8m) despite the consolidation of a full quarter of Ignis’ operating expenses. Although down from $38.3m a year ago, income from continuing operations rebounded to $21.6m, up from $19.5m last quarter.

During the quarter, cash and cash equivalents fell from $238.1m to $228m, due mainly to the repayment of $5.6m of Ignis debt and increases in accounts receivable and inventory.

At the end of the quarter, Finisar had about $40m in principal amount of convertible notes outstanding with a conversion price of $10.675 per share. Ignis also had outstanding debt equivalent to $4.3m. Under Finisar’s $70m secured credit facility with Wells Fargo Foothill, LLC, no borrowings were outstanding and $66.6m was available to borrow at the end of the quarter.

“Tunable XFPs were qualified at several additional customers during the second quarter and we expect more qualifications in the third quarter,” says Gertel. For fiscal third-quarter 2012, Finisar expects revenue of $235-250m and operating margin of 8.5-10.0%. “In addition, we have qualified our next-generation edge or access WSS modules with multiple customers and expect revenue from these products to continue to ramp in the first half of calendar 2012,” adds Gertel.

See related items:

Finisar’s quarterly revenue falls 3.7% to $228.2m

Finisar reports annual revenue up 50.6% to record $948.8m for fiscal 2011

Finisar grows 57.6% year-on-year to record quarterly revenue of $263m

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

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