Finisar Corporation (NASDAQ: FNSR) released their fourth quarter and fiscal 2017 reports yesterday, posting record fiscal revenues. Although the Q4-17 results as well as guidance for Q1-18 were poor, belief in a stronger Q2-18 rallied the stock price.
"Revenues for fiscal 2017, were $1.449 billion, an all-time record for Finisar and an increase of $186.1 million, or 14.7%, over fiscal 2016,” CEO of the company Jerry Rawls, said. All in all the release was a mixed bag though, as Q4-17 revenue was down $23.1 million, or 6.1%, and the non-GAAP gross margin slid from 37% down to 36.2%. The company attributed these declines to a decrease in telecom products, as the 3 month slide in prices has taken effect and revenues shrank from Chinese OEM customers. This also translated into a poor Q1-18 guidance, with revenue expected between $330 and $350 million, compared to Q4-17 haul of $357.5 million. Non-GAAP gross margin was expected to continue its slide to 35% and non-GAAP earnings per fully diluted share would sink to $0.37 to $0.43, compared to Q4-17 figures of $0.50. Further reports were not disclosed.
However, the market believed the company’s stance in its earnings call, in which it released a brighter outlook for Q2-18, “We expect revenue growth to resume in our second fiscal quarter primarily driven by the sales growth of 100 gigabit QSFP28 transceivers for the big hyperscale data centers and sales of VCSEL arrays for 3D sensing” said Kurt Adzema, Executive Vice President and CFO, “We are currently qualified at multiple other customers for our CFP2 ACO and are in the qualification process with a number of additional new customers,” he continued. This is in reality what prompted the spike in price on Friday, but unless the company actually gets those contracts, which the CEO underlined is not solidified, the poor guidance might catch up to them.