Finisar Corporation (NASDAQ:FNSR)

Highlights for the first quarter of fiscal 2011  

• Revenues increased to $207.9 million, up $19.4 million, or 10.3%, from  $188.5 million in the preceding quarter and up $79.2 million, or 61.5%,
  from $128.7 million in the first quarter of the prior year.
  
• Operating income increased to $23.7 million, or 11.4% of revenues, compared to $12.9 million, or 6.9% of revenues, in the preceding quarter and an operating loss of $(8.8) million, or (6.8)% of revenues, in the first quarter of the prior year.
  
• Net income from continuing operations was $19.4 million, or $0.24 per diluted share, compared to $14.1 million, or $0.19 per diluted share, in the preceding quarter and a loss of $(11.1) million, or $(0.18) per share, in the first quarter of the prior year.
  
  
• Non-GAAP operating income was $29.0 million, or 14.0% of revenues, up $10.7 million from $18.3 million, or 9.7% of revenues, in the preceding quarter, and up $25.7 million from $3.3 million, or 2.5% of revenues, in the first quarter of the prior year.
  
• Non-GAAP net income from continuing operations was $25.8 million, or $0.31 per diluted share, compared to net income of $16.7 million, or $0.22 per diluted share, in the preceding quarter and $1.8 million, or $0.03 per diluted share, in the first quarter of the prior year.
  
• Non-GAAP EBITDA rose to $37.3 million compared to $26.0 million in the
  preceding quarter and $10.4 million in the first quarter of the prior
  year.

OUTLOOK

The Company indicated that it currently expects:

• Revenues for its second fiscal quarter ending October 31, 2010 to be in the range of $215 to $230 million.
  
• On a GAAP basis, operating margin is expected to exceed 11.5%.
  
• Additional non-cash and infrequently occurring charges excluded in calculating non-GAAP operating income are expected to total approximately $5 to $7 million. As a result, on a non-GAAP basis, operating margin is expected to be in the range of 14% to 15%.

"This marks our third consecutive quarter of growth in revenues at double digit rates," said Jerry Rawls, Finisar's executive Chairman of the Board. "This is a result of a winning product portfolio and strong customer support as we worked to meet a surge in product demand. A robust order trend and healthy backlog have continued into our fourth fiscal quarter which should enable us to make a strong finish to this fiscal year."

"I am delighted with our progress in manufacturing operations and the improvements we were able to achieve in manufacturing yields," said Eitan Gertel, Finisar's Chief Executive Officer. "Our ongoing efforts to reduce product costs and transition production to our off-shore locations during the fourth fiscal quarter should position us well for realizing our previous target of 10% operating margin on a non-GAAP basis in the near future."

The Company indicated that it currently expects that revenues for its fourth fiscal quarter ending April 30, 2010 will likely range from $175 to $185 million. On a GAAP basis, gross margin is expected to be approximately the same as the third quarter with operating margin in the range of 4.5% to 6%. Additional non-cash and infrequently occurring charges excluded in calculating non-GAAP operating income are expected to total approximately $6 to $8 million. As a result, on a non-GAAP basis, gross margin is also expected to be approximately the same as the third quarter with non-GAAP operating margin in the range of 8.5% to 10%.

2010 Third quarter Non-GAAP net income from continuing operations was $11.5 million, or $0.17 per diluted share.