For its fiscal fourth-quarter 2013 (ended 28 April), fiber-optic communications component and subsystem maker Finisar Corp of Sunnyvale, CA, USA has reported revenue of $243.4m, up 2.1% on $238.4m the prior quarter.
Fiscal Q4/2012 Q1/2013 Q2/2013 Q3/2013 Q4/2013 Revenue $239.9m $220.5m $232m $238.4m $243.4m
"Growth in revenues came primarily from sales of 10G and 100G Ethernet transceivers and transponders for datacom applications," said executive chairman Jerry Rawls. Sales of products for datacom applications grew by 11% from $147.7m to $163.9m.
However, continued strength in sales of datacom products was partially offset by sales of telecom products falling 12.3% from $90.7m to $79.5m. This was primarily due to "sluggish carrier capital expenditure levels and a full three-month impact of the annual price reductions for telecom products most of which, as in prior years, went into effect in January".
"We had one 10%-or-greater customer," noted chief financial officer Kurt Adzema, regarding the firm's dependency on certain key customers. "Our top 10 customers represented 59% of total revenues compared to 54.9% in preceding quarter," he added.
"Our favorable product mix in the quarter enabled us to achieve gross margin and share earnings that exceeded our guidance range," said Rawls. On a non-GAAP basis, gross margin rose from 30.7% the prior quarter to 32.2%. Due mainly to the higher gross margin, operating income rose from $17.4m (an operating margin of 7.3% of revenue) to $20m (8.2% of revenue). Net income has risen from $16.4m ($0.17 per diluted share) to $19.8m ($0.20 per diluted share). During the quarter, cash and cash equivalents rose from $265.5m to $289.1m.
Capital expenditure totaled $25.4m, which was lower than guidance of about $32m. "This was a result of the slight delay in the timing of payments related to the new manufacturing facility we are building in Wuxi, China," said Adzema. "We still expect the building to be completed in the second half of calendar 2013." Capital expenditure is expected to be about $32m in fiscal Q1/2014, driven primarily by the new building.
For full-year 2013, revenue was $934.3m, down 1.9% on $952.6m the prior year. Non-GAAP operating income fell from $89.3m (9.4% of revenue) to $65.2m (7% of revenue), due mainly to lower gross margin and an increase in operating expenses as a result of increases in employee-related expenses, costs of materials associated with new product development, and the consolidation of financial results of Red-C Optical Networks (acquired earlier in fiscal 2013).
"During the latest quarter, we continued to invest in technology and product development and made substantial progress on a number of new products for our communications products lines, including our next-generation 100G CFP2 transceiver, 12x25G optical engine and new-generation dual-wavelength selective switch ranges," said CEO Eitan Gertel.
Finisar noted that, during fiscal Q4/2013 and during the first week of Q1/2014, it completed the divestment of two non-strategic subsidiaries of Ignis AS (acquired by Finisar in May 2012). These divested businesses accounted for about in revenue in fiscal Q4/2013.
Outlook
"As we start the new fiscal year, we are expecting revenue and operating income to grow again in Q1/2014," said Rawls. Revenues should be $245-260m. "This will be our fourth consecutive quarter with sequential revenue and earnings growth," he adds. Finisar expects continue improvements in gross margin (to about 33%), operating margin (to 9-10.5%) and earnings per diluted share (to $0.22-0.26).
"For the full fiscal year 2014, we expect revenue to grow 10-15% over fiscal 2013, driven by continued strength for 10G, 40G and 100G Ethernet products for datacom and increased telecom carrier spending in the second half of the year," Rawls said. "Fiscal 2014 [could] be our first year with revenues over $1bn."
See related items:
Finisar's quarterly revenue down year-on-year, but profits and revenue up sequentially due to datacoms
Finisar's quarterly revenue grows 5%
