Finisar's New Numbers
4:50 PM Great stuff, if you like puzzles
4:50 PM -- I was relieved last quarter to hear somebody else say Finisar Corp. (Nasdaq: FNSR) had confusing earnings. It's not just me, then.
Finisar just has a lot going on, financially. There was a debt buyback in August, for instance.
The real kicker was the sale of the Network Tools business -- test gear for Fibre Channel devices -- to JDSU (Nasdaq: JDSU; Toronto: JDU). (See JDSU Deal Addresses Finisar's Debt.) Network Tools now gets pushed into the "discontinued operations" category, meaning it's not part of Finisar's reported revenues. Which means there's a bit of backing-out to do if you want to create comparisons to past quarters.
Finisar's first-quarter earnings, reported yesterday, managed to put things rather clearly, I thought. If I'm reading the charts right, here's how the breakdown went, for the optics portion only:
Table 1: Finisar: Optics Alone
1Q09 | 1Q10 | Change (%) | |
Revenues ($M) | 115.8 | 128.7 | +11% |
Net Income ($M) | 2.9 | -11.1 | -483% |
EPS ($, GAAP) | 0.01 | -0.02 | -300% |
Share Price ($) | 1.18 | 1.02 | -14% |
Source: Finisar, Yahoo Finance. Figures exclude the Network Tools business sold to JDSU. |
But the $115.8 million doesn't include Optium, which hadn't been fully assimilated as of August 2008. Optium reported $47.2 million for the quarter ended Aug. 2, 2008, which means the combined Finisar/Optium had $158 million revenues in the year-ago quarter. If I'm doing all the math right.
Just to keep things interesting, Finisar also announced a 1-for-8 reverse stock split to come on Sept. 25. It's not a surprise; companies need to keep a stock price above $1 to keep the trading exchange happy and to attract institutional investors.
Finisar didn't mention that on the earnings call. Its stated reason for the reverse split is another common one, though: to make earnings-per-share growth more obvious by lowering the number of shares, CEO Jerry Rawls said.
He might have a point. At the current number of shares outstanding, Finisar's earnings-per-shares is as flat as Kansas.
Table 2: Finisar's EPS Crawl
3Q09 | 4Q09 | 1Q10 | 2Q10 | 3Q10 | |
Earnings | 0 | 0 | 0 | 1* | 1* |
* Projected. All figures non-GAAP. |
— Craig Matsumoto, West Coast Editor, Light Reading
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