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Finisar (FNSR) Q1 Earnings Match Estimates, Revenues Miss

Zacks Equity Research

Finisar Corporation FNSR reported mixed results for first-quarter fiscal 2020 (ended Jul 28, 2019) as revenues decreased year over year but net loss narrowed.

Net Loss

On a GAAP basis, net loss for the quarter was $8.7 million or loss of 7 cents per share compared with net loss of $18.5 million or loss of 16 cents per share in the year-ago quarter. The year-over-year improvement was primarily attributable to lower cost of sales.

Excluding non-recurring items, non-GAAP net income for the reported quarter jumped to $27.6 million or 23 cents per share from $21.3 million or 18 cents per share in the year-earlier quarter. Non-GAAP earnings were in line with the Zacks Consensus Estimate.

Finisar Corporation Price, Consensus and EPS Surprise

 

Finisar Corporation Price, Consensus and EPS Surprise

Finisar Corporation price-consensus-eps-surprise-chart | Finisar Corporation Quote

Revenues

Quarterly revenues decreased to $285 million from $317.3 million in the prior-year quarter owing to challenging macroeconomic environment. The top line also lagged the consensus estimate of $310 million. While revenues for datacom applications were down due to lower demand and soft sales of fiber channel transceivers, the same for telecom applications declined due to lower sales of wavelength selective switches.

Other Quarterly Details

Cost of revenues was $197.6 million compared with $236.2 million in the year-ago quarter. Gross profit rose to $85.3 million from $80.7 million, resulting in respective gross margins of 29.9% and 25.4%.

Total operating expenses declined to $94.8 million from $96.4 million owing to lower R&D costs, partially offset by higher startup costs. Finisar reported operating loss of $9.5 million compared with loss of $15.7 million in the prior-year quarter.

Liquidity

As of Jul 28, 2019, Finisar had $882.3 million in cash and equivalents with $516.7 million of long-term liabilities in the form of convertible notes.

The company did not provide guidance for the second quarter of fiscal 2020 due to its previously announced proposed acquisition by II-VI Incorporated IIVI.

Zacks Rank & Stocks to Consider

Finisar currently has a Zacks Rank #3 (Hold). A couple of better-ranked stocks in the broader industry are Nokia Corporation NOK and Viasat Inc. VSAT, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.    

Nokia beat earnings estimates thrice in the trailing four quarters, the average being 89.3%.  

Viasat beat earnings estimates in each of the trailing four quarters, the average positive surprise being 230.6%.

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Nokia Corporation (NOK) : Free Stock Analysis Report
 
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II-VI Incorporated (IIVI) : Free Stock Analysis Report
 
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