LONDON, UK / ACCESSWIRE / September 13, 2016 / Active Wall St. announces its post-earnings coverage on Finisar Corp. (NASDAQ: FNSR). The company released its financial results for the first quarter fiscal 2017 (Q1 FY17) on September 08, 2016. The Sunnyvale, California-based company recorded a 7.1% sequential growth in its revenue for Q1 FY17, outperforming market expectation. Register with us now for your free membership at: http://www.activewallst.com/register/.

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Earnings Reviewed

For Q1 FY17, Finisar reported revenue of $341.33 million, which came in above the $318.79 million recorded at the end of Q4 FY16, primarily driven by strong demand for 100 GB/s transceivers, as well as wavelength selective switches. The market expected the company to post revenues of $332.75 million for the reported quarter.

The company recorded GAAP net income of $23.95 million, or $0.22 per diluted share, in Q1 FY17, compared $13.07 million, or $0.12 diluted share, in Q4 FY16. Non-GAAP net income for Q1 FY17 improved to $41.83 million, or $0.38 per diluted share, from $31.82 million, or $0.29 per diluted share, in Q4 FY16. The company's Q1 FY17 non-GAAP net income outperformed market expectations of $0.30 per diluted share.

"The combination of revenues being at the higher end of our guidance range and better than expected gross margins resulted in earnings per fully diluted share exceeding the upper end of our guidance range," said Jerry Rawls, Finisar's Chief Executive Officer.

Earnings Metrics

During Q1 FY17, GAAP gross profit improved to $108.17 million, or 31.7% of revenues from $90.44 million, or 28.4% of revenues in the quarter ending May 1, 2016. The company attributed this improvement to favorable product mix and larger volume leverage benefits of vertical integration.

In the reported period, the company's non-GAAP operating expenses increased to $69.34 million compared to $66.19 million in the previously reported quarter. However, non-GAAP operating expenses, as a percentage of revenues, decreased to 20.3% of revenues in the Q1 FY17 from 20.8% in Q4 FY16.

Segment-wise

During the quarter, the fiber optic component supplier's Telecom product sales surged 29.0%, $22.0 million, sequentially to $97.9 million, primarily on higher sales in wavelength switches and 100G transceivers.

The company's Datacom products sales improved $0.5 million, or 0.2% sequentially to $243.4 million, primarily driven by growth in 100 gigabit transceivers and partially offset by a decline of the sale of wireless applications transceivers.

Finisar informed Wall Street that it had two customers in Q1 FY17, who each contributed more than 10% to total revenue. Additionally, top-10 customers of the company contributed 60.2% to total revenues compared to 56.4% in Q4 FY16.

Cash Flow & Balance Sheet

As on July 31, 201, Finisar has long term liabilities of $232.02 million as outstanding compared to $229.39 million as on the close of books in previous quarter. Additionally, the company had $280.41 million in cash and cash equivalents as on July 31, 2016, compared to $299.22 million as on May 01, 2016.

Outlook

Finisar expects revenue is be in the range of $355 million to $375 million for Q2 FY17. The company anticipates non-GAAP gross margin of approximately 34% with non-GAAP operating margin in the range of 14.3% to 15.3% for Q2 FY17. Additionally, non-GAAP earnings per share for the upcoming quarterly report are forecasted to be in the range of $0.44 to $0.50.

Peer Performance

Cisco in its earnings release on August 17, 2016, had reported net sales of $12.6 billion for Q4 FY16 compared to $12.8 billion in Q4 FY15. The company's GAAP net income for Q4 FY16 was $2.8 billion, or $0.56 per diluted share, compared to $2.3 billion, or $0.45 per diluted share, in Q4 FY15.

On August 25, 2016, Zayo Group Holdings, Inc.'s consolidated revenue surged 25% sequentially in Q4 FY16 to $507.3 million. However, the company's net loss widened to $30.9 million during Q4 F16 from $19.3 million recorded during the quarter ending March 31, 2016.

Stock Performance

At the closing bell, on Monday, September 12, 2016, Finisar's stock climbed 2.48%, ending the trading session at $26.85. A total volume of 4.22 million shares were traded at the end of the day, which was higher than the 3-month average volume of 1.56 million shares. In the last one month and previous three months, shares of the company have advanced 39.84% and 59.54%, respectively. Moreover, the stock gained 84.66% since the start of the year. Currently, the stock is trading at the PE ratio of 52.44.

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