Finisar Becomes a Finished Czar in Optics (FNSR, JDSU, CIEN)

Finisar Corporation (NASDAQ: FNSR) had been resurrected in the world of fiber optics equipment.  The company’s third quarter revenue met estimates last night but its fourth quarter guidance was light.  When you had shares at $40.04 versus a 52-week trading range of $11.98 to $46.09, simply meeting and reaffirming alone was not going to be enough.  So a weak forecast is absolutely crushing shares.

The outfit’s third quarter revenue was up 58% to $263 million and earnings were $0.47 EPS.  Earnings met expectations and revenues were about $5 million above estimates.

Guidance for the current quarter of $235 million to $250 million in revenue is south of the $269.1 million that had been expected.  Earnings were projected to be $0.31 to $0.35 EPS versus the $0.48 estimate.

While the reasons are many, the magnitude of the miss was enough to take a bite out of peers.  To blame were longer negotiation periods for year-end by telecom customers, Chinese New Year forcing a week of business closure in China, and a generally slower Chinese business demand.

JDS Uniphase Corporation (NASDAQ: JDSU) is indicated down under $22.00 in early trading versus a $25.38 close, but its shares traded over 4.7 million shares in NASDAQ after-hours trading last night.  CIENA Corp. (NASDAQ: CIEN) is indicated down around $24.00 after a $25.68 close.

Finisar shares closed at $40.04 and the stock is now indicated down under $25.00 on more than 75,000 pre-market shares with just under two hours until the close.  Finisar went out at $25.70 on more than 4.3 million shares in the after-hours trading session alone.

JON C. OGG