Finisar Corporation (NASDAQ:FNSR) Eyes New 52-Week High after Earnings Beat


Finisar Corporation (NASDAQ:FNSR) is evoking strong interest on Wall Street after posting better than expected first quarter earnings. Fuelling further interest on the stock is a second quarter guidance that points to continued growth for the current 2017 fiscal year.

Stock Performance

The stock is currently trading at highs of $28.22 closing in a 52-week high of $29.25 a share. Since the start of the year, Finisar has gained more than 80% in market value making it one of the best performers in the industry.

How much higher stock can move remains the talk of the street, given the recent momentum amidst waning short interest pressure. A 7.1% sequential growth in revenues in the first quarter all but affirms the growth trajectory that Finisar finds itself in having outperformed market expectations.

Strong Datacom Demand

Strong demand for the company’s 100GB/s transceivers continues to fuel sales growth further affirming the company’s’ growth prospects. Revenues of $341.33 million in the first quarter beat Wall Street expectations of $332.75 million leading to a net income of $23.95 million compared to a net income of $13.07 million in the fourth quarter.

“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.

Datacom sales were up by 0.2% sequentially to highs of $243 million as demand for 100-gigabit transceivers continued to clock new highs. While Finisar continues to enjoy strong demand for its 100-gigabit transceivers, the same is not the case with its wireless applications transceivers. A decline in sales, in this case, had to be offset by growth in other sectors.

Finisar Corporation (NASDAQ:FNSR) expects revenues of between $355 million and 4375 million for the current quarter, which should lead to gross margins of 34%. The company finished the second quarter with liabilities of $232 million and cash and cash equivalent of $280.41 million.


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