Finisar Corp. (FNSR) Tops Views

Finisar Corp. (FNSR) shares are up $0.22 to $21.03 in after-hours trading Thursday after the company reported its third quarter 2015 earnings results.

The optical components manufacturer reported earnings of $0.25 per share on revenues of $306.3 million, up 4.2% from a year ago. Analysts were expecting EPS of $0.25 on revenues of $305.36 million. Finisar said Q4 GAAP gross margin decreased to 25.5% from 28.6% in Q3 vs. a non-GAAP gross margin decrease of 30.0% from 31.1% in the preceding quarter. GAAP operating expenses also declined, decreasing $17.6 million to $74.6 million from $92.2 million in Q3.

“Although our gross margins declined primarily as a result of our annual telecom price reductions and low yields on a new optical engine product, we significantly decreased our operating expenses resulting in a minimal impact to our earnings,” said in a statement Eitan Gertel, Finisar’s Chief Executive Officer.

For Q4/15, FNSR provided EPS guidance of $0.22-$0.28 versus consensus of $0.23 per share. The company also issued revenue projection of $310-$330 million, compared to the consensus revenue estimate of $307.90 million.

On valuation measures, Finisar Corp. shares, which currently have an average 3-month trading volume of 1.31 million shares, trade at a trailing-12 P/E of 36.07, a forward P/E of 15.66 and a P/E to growth ratio of 1.33. The median Wall Street price target on the name is $21.00 with a high target of $26.00. Currently ticker boasts 9 ‘Buy’ endorsements, compared to 6 ’Holds’ and no ‘Sell’.

Profitability-wise, FNSR has a t-12 profit and operating margin of 4.79% and 5.40%, respectively. The $2.15 billion market cap company reported $488.9 million in cash vs. $253.44 million in debt in its most recent quarter.

FNSR currently prints a one year loss of about 15.29% and a year-to-date return of around 4.48%.

The chart below shows where the equity has traded over the last 52 weeks.

Finisar Corp. provides optical subsystems and components for data communication and telecommunication applications in the United States, Malaysia, China, and internationally. The company was founded in 1987 and is headquartered in Sunnyvale, California.

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