22 Jun 2016
Mixed results for US subsystems and components developer, but further improvement expected for 2017.Finisar, a developer of fiber optic subsystems and components, has announced its fourth fiscal quarter and full year 2016 financial results, both of which ended May 1, 2016. The headline fourth quarter figure was revenue totaling $318.8m, down slightly on the $320m of one year ago but up 3.1% on $309.2m of the previous quarter.
Growth was driven by sales of 40G and 100G transceivers (including CFP, CFP2, CFP4, QSFP and QSFP28 form factors). Datacoms system sales totaled $242.9m, up 11% on the $219.3m in the previous quarter, which was also better than Finisar’s previous quarter record of $242m in the year-ago equivalent.
Jerry Rawls, Finisar's Chief Executive Officer, commented, “Revenues for our fourth quarter were $318.8 million, an increase of $9.6 million, or 3.1% compared to the prior quarter. These sales were primarily driven by growth in demand for 40G and 100G transceivers for datacom applications. Better-than-expected gross margins were due to the company's favorable product mix and lower expenses, which resulted in earnings per share exceeding the upper end of our guidance."
Sales of products for telecom applications decreased by $14.1m, or (15.6)%, compared to the preceding quarter, primarily as the result of the full three months of the telecom price negotiations and an unexpected decline in demand for legacy products including 10G fixed wavelength and tunable transceivers and amplifiers.
In addition, factors expected to partially offset the negative impacts on telecom revenue above during the quarter were lower in magnitude than was expected due to delays in adding manufacturing capacity for wavelength-selective switches and delays in the qualification of new ROADM line card designs, Rawls added.
Compare the market: Key figures from Finisar's 2016 / 2015 trading.
Highlights of 2016
Full-year sales revenue was $1263.2m, up 1% on $1250.9m in 2015, as a drop of $4.2m in datacom product sales, due mainly to having only 52 weeks in the fiscal year compared to 53 weeks in 2015, was offset by a $16.4m rise in telecom product sales. These in turn were driven mainly by growth in demand for wavelength-selective switches, the company stated.
Annual (2016) gross margin was 30.3%, compared with 30.9% in the prior year due to lower average selling prices. Operating expenses were $269.9m ($270.0m in Q4 2015). Earnings per fully diluted share was $1.01 compared to $1.04 in the preceding year's equivalent. Cash, cash equivalents and short term investments improved by $72.3m to $562.5m at the end of the financial year.
Considering its outlook for the forthcoming quarter’s trading, Finisar commented, “that for the first quarter of fiscal 2017, we currently expect revenues in the range of $323m to $343m; gross margin of approximately 31%; an operating margin of approximately 9.9% to 10.9%; and earnings per share of approximately $0.27 to $0.33." [All figures quoted here are non-GAAP].
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