Finisar looks revenue slide continuing

The company revealed that revenues for the quarter declined $3 million for the quarter, to $239.9 million, compared to the previous quarter. The results were within guidance, but less than the consensus $243 million analysts had expected. An uptick in sales of its datacom-related products could not overcome weakness in the telecom segment, the company said.

"The lower telecom revenues were primarily the result of sluggish carrier capital expenditures and the full three-month impact of annual price reductions for telecom products,” said Jerry Rawls, Finisar's executive chairman of the board.

GAAP gross margin was 27.3% -- 31.4% on a non-GAAP basis  -- compared to 29.3% and 31.8% in the preceding quarter. Again, the declines reflected the impact of the annual price reductions for telecom products over the full quarter, the company stated.

“We were pleased that our gross margin for the quarter exceeded our guidance, resulting in earnings per diluted share which was at the upper end of our guidance range," Rawls said.

However, good times are not right around the corner. Finisar management said they expect revenues for the first quarter of fiscal 2013 range between $218 million and $233 million. GAAP operating margin will be in the range of approximately 0.5% to 2.0%, they predicted, with non-GAAP earnings per diluted share in the range of $0.11 to $0.15.

Taking the just concluded fiscal year as a whole, the company held its own. Revenues increased to $952.6 million, up $3.8 million, or 0.4%, from the $948.8 million it earned during the preceding year. Again datacom products led the way, up $59.0 million, or 12.3%. This success offset a year-on-year decline of 11.7% in the sale of telecom products for telecom, which came in at $55.2 million.

Gross margin for fiscal 2012 was 28.7% on a GAAP basis and 31.9% on a non-GAAP basis, compared to 32.9% and 34.8% for the prior year. Finisar attributed the shrinkage to a decline in average selling prices (partially offset by reduced material costs), under-utilization of certain manufacturing facilities, and consolidation of the financial results of Ignis, which the company acquired last July.