Finisar Corp (FNSR) Stock | Up 20% Despite Market Sell-off

2006

Finisar Corporation, (NASDAQ: FNSR)

 

Last Thursday after the market closed, Finisar, the fiber optic systems provider reported better than expected financial results for its fiscal 2016, second quarter ended in October. The company also reiterated revenue and earnings forecasts for the current third quarter. On Friday, investors rewarded the company with an almost 20% increase in the stock price.

 

FNSR Earnings

Finisar reported second quarter non-GAPP earnings of $0.25 per share on revenue of $321 million. This compares to consensus estimate earnings of $0.23 per share and revenue of $314 million.  For the third quarter, the company expects earnings of between 19 and 25 cents per share and revenue between $300 and $320 million.

 

CEO Comments

“Revenues for our second fiscal quarter grew about 2.3 percent from the previous quarter. This raise was primarily driven by growth in 100 gigabit Ethernet transceivers and 10 gigabit tunable transceivers and wavelength selective switches for telecom wavelength division multiplexing applications. We are seeing continued demand for 100 gigabit Ethernet transceivers, however we expect that growth to be more than offset by reduced revenue in 40 Gigabit Ethernet transceivers,” said chairman & CEO Jerry Rawls. “This is due to the lumpiness in demand at multiple large data-centers,” he added.  Yahoo Finance

 

FNSR Technical Analysis

FNSR 2015-12-14-TOS_CHARTS

FNSR is down significantly from 12-month highs of $23.38 reached in March. More recently, the stock has traded in a tight channel between $11.00 and $12.50 since the company announced disappointing earnings this past September. Last Friday’s earnings reaction saw the stock climb 20% during a broad market sell-off on 13 times average daily volume. Yesterday was a digestion day with the stock trading in a tight sideways range, but it did close the first quarter earnings gap at $14.57. The high on Monday of $14.64 was also a key level of support in the weeks leading into the Q1 earnings sell-off in September. Monday’s close of $14.31 sits just below VWAP and the 9-day and 20-day exponential moving averages, on a 5-minute chart. For a long trade I want to see a push through those technical levels. The next resistance is Monday’s high of $14.64 and then the $15 area. Above that, $15.50 and $15.90 could slow it down.  On the short side, a failure of the $14.10 – $14.05 area could then find support near $13.80, $13.40 and $13.

 

Company Profile

Finisar Corporation (Finisar) is a provider of optical subsystems and components that are used in data communication and telecommunication applications. The Company’s optical subsystems consist of transmitters, receivers, transceivers, transponders, optical engines and active optical cables that provide the fundamental optical-electrical, or optoelectronic, interface for interconnecting the electronic equipment used in communication networks, including the switches, routers and servers used in wireline networks, as well as the antennas and base stations used in wireless networks. These products rely on the use of semiconductor lasers and photodetectors in conjunction with integrated circuits and optoelectronic packaging to provide a means for transmitting and receiving digital signals over fiber optic cable at speeds ranging from less than one gigabit per second, to more than 100 gigabits per second, over distances of less than 10 meters to more than 2,000 kilometers. Google Finance

 

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