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Finisar (FNSR) Q4 Earnings Beat Estimates, Revenues Miss

Zacks Equity Research

Finisar Corporation’s FNSR fourth-quarter fiscal 2019 (ended Apr 28, 2019) revenues remained almost flat year over year but net loss narrowed. The bottom-line performance was largely driven by lower cost of sales.

Net Loss

On a GAAP basis, net loss for the quarter was $14.2 million or loss of 12 cents per share compared with net loss of $18.3 million or loss of 16 cents per share in the year-ago quarter. The year-over-year improvement was mainly driven by lower cost of sales.

For fiscal 2019, net loss was $53.2 million or loss of 45 cents per share compared with net loss of $48.3 million or loss of 42 cents per share in fiscal 2018.

Non-GAAP net income for the reported quarter came in at $33 million or 27 cents per share, beating the Zacks Consensus Estimate by a penny.

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 remained almost flat year over year at $310.1 million. The top line lagged the consensus estimate of $328 million. For fiscal 2019, revenues decreased 2.7% year over year to $1,280.5 million.

Other Quarterly Details

Cost of revenues was $218.5 million compared with $246.5 million in the year-ago quarter. Gross profit was $87.3 million compared with $62.6 million in the year-earlier quarter. Gross margin was 28.2% compared with 20.2% in the year-ago quarter.

Total operating expenses increased to $98.6 million from $89.3 million, primarily due to higher startup costs. Finisar reported operating loss of $11.3 million compared with loss of $26.7 million in the prior-year quarter.

Liquidity

As of Apr 28, 2019, Finisar had $814.2 million in cash and equivalents with $512.1 million of convertible notes (long-term liabilities).

The company did not provide guidance for the first 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 few better-ranked stocks in the broader industry are Ciena Corp. CIEN, sporting a Zacks Rank #1 (Strong Buy) and Ubiquiti Networks, Inc. UBNT, carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Ciena has long-term earnings growth expectation of 17.3%.

Ubiquiti has long-term earnings growth expectation of19.8%.

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