Finisar, a global technology leader for subsystems and components for fibre optic communications, announced in June financial results for its fourth quarter and full fiscal year 2016, ended May 1, 2016.
“Revenues for our fourth fiscal quarter were $318.8m, an increase of $9.6m, or 3.1% compared to the prior quarter, primarily driven by growth in demand for 40G and 100G transceivers for datacom applications including CFP, CFP2, CFP4, QSFP and QSFP28 form factors. Better than expected gross margins, due to favourable product mix, and lower expenses resulted in earnings per fully diluted share exceeding the upper end of our prior guidance range,” said Jerry Rawls, Finisar’s Chief Executive Officer.
Telecom product sales were $75.9m, down 15.6% on $89.9m last quarter (and less than the $78.1m a year ago), primarily as a 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 were weaker than expected due to delays in adding manufacturing capacity for wavelength-selective switches (WSS) and delays in the qualification of new reconfigurable optical add-drop multiplexer (ROADM) line-card designs.
Full-year revenue was $1263.2m, up 1% on $1250.9m in fiscal 2015, as a drop of $4.2m in datacom product sales fell by (due mainly to having only 52 weeks in the fiscal year compared to 53 weeks in fiscal 2015) was offset by a $16.4m rise in telecom product sales (driven mainly by growth in demand for wavelength-selective switches).
On a non-GAAP basis, full-year gross margin was 30.3%, down from 30.9% in fiscal 2015 due to lower average selling prices. However, fiscal Q4 gross margin was 30.6%, up from 30.3% last quarter (and above the expected 30%), as favourable product mix offset the impact of the full three months of annual telecom price negotiations (which typically take effect on 1 January).
Operating expenses have been cut further, from $68.2m a year ago and $67.3m last quarter to $66.2m (better than the expected $67.5m), due mainly to lower general & administrative (G&A) costs (including lower legal expenses).
Full-year operating income has fallen from $116.1m (operating margin of 9.3% of revenue) in fiscal 2015 to $112.3m (8.9% of revenue) for fiscal 2016. However, quarterly operating income was $31.2m (operating margin of 9.8% of revenue, above the expected 8.2-9.2%), up from $26.3m (8.5% of revenue) last quarter.
Full-year net income $109.8m ($1.01 per fully diluted share), down from $110.4m ($1.04 per fully diluted share) in fiscal 2015. However, fiscal Q4 net income was $31.8m ($0.29 per diluted share), up from $26.6m ($0.25 per diluted share) last quarter.
Considering the outlook, Finisar indicated that for the first quarter of fiscal 2017 it currently expects revenues in the range of $323 to $343m, non-GAAP gross margin of approximately 31%, non-GAAP operating margin of approximately 9.9% to 10.9%, and non-GAAP earnings per fully diluted share in the range of approximately $0.27 to $0.33.
By Optical Connections News Team