Finisar's New Numbers

4:50 PM Great stuff, if you like puzzles

Craig Matsumoto, Editor-in-Chief, Light Reading

September 11, 2009

2 Min Read
Finisar's New Numbers

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%



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

EarningsPer Share (�)

0

0

0

1*

1*



— Craig Matsumoto, West Coast Editor, Light Reading

About the Author(s)

Craig Matsumoto

Editor-in-Chief, Light Reading

Yes, THAT Craig Matsumoto – who used to be at Light Reading from 2002 until 2013 and then went away and did other stuff and now HE'S BACK! As Editor-in-Chief. Go Craig!!

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