Finisar shares plunge after 2Q earnings miss

AP News
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Posted: Dec 04, 2009 3:00 PM

Shares plunged in Finisar Corp. on Friday after the networking-components maker reported lower-than-expected profit margins and fell short of expectations for the second quarter.

Shares fell $1.15, or 11.8 percent, at $8.56 in afternoon trading.

Finisar said late Thursday it posted a loss of $31.5 million in its fiscal second quarter to Nov. 1, compared with a loss of $189 million a year earlier.

Adjusting for one-time items, earnings came to 11 cents per share, a penny shy of the average forecast of analysts polled by Thomson Reuters.

Revenue fell 1.4 percent to $146 million, but was still above the forecast of $138 million. Meanwhile, adjusted gross margins fell to 29.6 percent from 32.7 percent.

Morgan Keegan analyst Paul Bonenfant said profit margins were dragged down as the company shifted some production offshore, but he kept an "Outperform" rating on the shares with a fair value estimate at $14.

He also raised earnings estimates for the fiscal year to 44 cents per share, from 36 cents.

"The margin drag may pressure the stock, but estimates rise on the top-line strength," he wrote.

Finisar said Thursday it expects revenue for the fiscal third quarter through Jan. 31 will range from $148 million to $158 million, which was ahead of estimates of $148 million.