Finisar (FNSR 27.85, +2.21) has jumped 8.6% after reporting in-line earnings for the fourth quarter and guiding first quarter results below analyst expectations.
The technology company, which specializes in optical communication components and subsystems, reported in-line fourth quarter earnings of $0.50 per share on a 12.1% year-over-year spike in revenue to $357.50 million.
Non-GAAP gross margin increased to 36.2% from 30.6% one year ago while operating margin improved to 16.3% from 9.8% one year ago.
Fourth quarter Datacom sales decreased by 1.1% on a sequential basis while sales of 100G transceivers for Datacom applications grew 30.0% sequentially. The increase in demand for 100G technology was offset by weaker demand for 10G and below shortwave receivers. Fourth quarter telecom product sales fell 18.2% sequentially due to reduced revenue from Chinese OEM customers and the impact of the full three months of annual telecom price erosion.
For the full year, Datacom sales increased 14.7% year-over-year due to an 80.0% surge in demand for 100G transceivers. Telecom product sales grew 22.0% to $73.50 million, also thanks to growth in demand for 100G.
Looking ahead, the company issued cautious guidance for the first quarter due to a slowdown in spending on fiber optic technology in China. The company expects first quarter earnings between $0.37 per share and $0.43 per share, which is well below current market expectations. Revenue is expected between $330 million and $350 million, which is also shy of estimates. Non-GAAP operating margin is expected around 14.0%.