Finisar Corporation Shares Gaining After Earnings Announcement
Shares of Finisar Corporation were up 7.76% in the after hours trading session on Thursday June 15th 2017. Shares were up this much because they announced their Stellar earnings just after the market closed at 4 p.m. eastern Daylight Time. In the regular session, shares were up $0.38 or 1.5% closing at $25.64.
Shares have been in a sideways Trend pattern since the beginning of March when they gap down on poor earnings and have spent the last few months consolidating. The price action that will ensue in the morning suggests a challenge of a trend line which has been resistance since the latter part of March. This is noted in the daily chart we show below.
FNSR Numbers
The company reported profit of 50 cents per share on sales of $359 million dollars. This was up 72% from a year ago and which fell within analyst estimates. The revenue side is where they slightly missed what some analysts had been expecting.
This caused the shares to sell off as a first reaction when the earnings were announced and then subsequently rallied after the conference call had had a chance to address some of the issues.
Analyst’s Comments
Troy Jensen, analyst at Piper Jaffray, says conservative guidance was expected. Jensen, in a report published before the earnings release, added that Finisar’s outlook on the 3D sensor market could keep the stock from sliding.
“We believe July quarter guidance will be below consensus expectations given the sustained weakness in China, This should not come as a surprise to most investors given the soft guidance nearly every other optical component supplier has reported over the past month. Despite the potential for reduced forward estimates, we would be buyers of Finisar stock as we believe China weakness is already factored into the current stock price and we believe potential commentary regarding 3D sensing demand would be viewed favorably and propel the stock higher.”
Company Comments
Jerry Rawls, Finisar’s Chief Executive Officer had this to say in their conference call:
“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. Despite continued robust demand in our fourth fiscal quarter for our 100G QSFP28 transceivers for datacenter applications, which grew over 30% over the third quarter, our overall revenues were $357.5 million, a decrease of $23.1 million, or 6.1%, compared to the third quarter. This decline was primarily the result of a decline in telecom revenues due to lower revenues from our Chinese OEM customers and the impact of the full three months of the annual telecom price erosion,”
Finisar Charts
(Click on image to enlarge)
The above price chart shows the intraday action on the left and the subsequent after hours trading session once the earnings were announced. You can see the immediate sell-off with the red candle bar, followed by a series of basing candlesticks and then the sharp rise higher once the conference call began.
(Click on image to enlarge)
The above price chart shows the daily action going back to the beginning of 2017. The reader can see 3 red horizontal lines each depicting resistance levels that finisar must challenge and overcome before higher prices can be seen.
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