Will Lower Revenues Dampen Finisar's (FNSR) Q2 Earnings?
Zacks Investment Research | Nov 30, 2018 05:06AM ET
Finisar Corporation (NASDAQ:FNSR) is scheduled to report second-quarter fiscal 2019 financial results (ended Oct 28, 2018) before the opening bell on Dec 3. In the last reported quarter, the company delivered a positive earnings surprise of 50%.
Let’s find out how things are shaping up prior to the announcement.
Factors to Consider
Finisar maintains a leading position in supplying optical communications, providing components and subsystems to networking equipment manufacturers, data center operators, telecom service providers, consumer electronics and automotive companies. In its core business, the company expects to witness strong demand for ROADMs on a global basis with India and China beginning to deploy ROADMs in large volumes.
For the upcoming 5G transition for wireless, it is a leading supplier of the major OEMs of 25 gig and 100 gig data rates for both short and long-reach applications. The company is well positioned for the 100 gig to 400 gig transition in the enterprise and data center markets starting calendar year 2019.
During the second quarter of fiscal 2019, Finisar announced the sample availability of its new Flextune self-tuning feature for tunable Dense Wavelength-Division Multiplexing transceiver modules. Notably, Flextune is an automatic transceiver wavelength tuning feature that can minimize provisioning time and operating expenses.
For the second quarter, management expect revenues in the range of $315 million to $335 million primarily driven by strong demand for VCSEL arrays for 3D sensing applications in connection with the timing of product introductions, however partly offset by lower revenues associated with 10-gig and Ethernet transceivers. Furthermore, the company is making steady progress with many new VCSEL array customers for both consumer and automotive applications that will drive growth in this market segment.
For the quarter, the Zacks Consensus Estimate for total revenues stands at $328 million, down from $332 million reported in the year-earlier quarter. Adjusted earnings per share are projected at 21 cents, down from 23 cents reported a year ago.
What Our Model Says
Our proven model does not conclusively show a beat for Finisar this earnings season as it does not have the two key components. A stock needs to have both a positive
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