Finisar Profit Down, Outlook Weak; Shares Fall 9%

(RTTNews) - Telecommunications equipment maker Finisar Corp. (FNSR), Thursday reported a drop in profit for the first quarter, hurt largely by lower revenues and some weak margins. Both earnings and revenues for the quarter fell shy of Wall Street estimates.

Moving ahead, the company detailed a weak outlook for the second quarter, sending its shares down a near 9 percent.

Sunnyvale, California-based Finisar's first-quarter profit dropped to $3.4 million or $0.03 per share from $14.2 million or $0.14 per share last year.

Excluding one-time items, adjusted earnings for the quarter declined to $24.5 million or $0.23 per share from $33.9 million or $0.32 per share last year. On average, 14 analysts polled by Thomson Reuters expected earnings of $0.26 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the first quarter dropped to $314.0 million from $327.6 million last year. Analysts had a consensus revenue estimate of $318.7 million for the quarter.

Gross margins for the quarter dropped to 27.8 percent from 30.2 percent last year, while total operating expenses increased to $80.3 million from $78.5 million a year ago.

Looking forward to the second quarter, the company expects adjusted earnings of about $0.20 to $0.26 per share on revenues of $304 million to $324 million. Analysts currently estimate earnings of $0.28 per share on revenues of $328.0 million for the quarter.

Separately, Finisar said its Chief Executive Officer Eitan Gertel has resigned. Jerry Rawls, the company's Executive Chairman, will assume the role of CEO. The company did not provide any reason for the resignation.

FNSR closed Thursday's trading at $14.91, up $0.16 or 1.08%, on the Nasdaq. The stock, however, dropped $1.31 or 8.79% in the after-hours trade.