Finisar Corp (FNSR) has reported a 633.97 percent jump in profit for the quarter ended Oct. 30, 2016. The company has earned $48.76 million, or $0.43 a share in the quarter, compared with $6.64 million, or $0.06 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $65.15 million, or $0.58 a share compared with $26.86 million or $0.25 a share, a year ago.
Revenue during the quarter grew 15.17 percent to $369.86 million from $321.14 million in the previous year period. Gross margin for the quarter expanded 840 basis points over the previous year period to 36.14 percent. Total expenses were 85.72 percent of quarterly revenues, down from 97.08 percent for the same period last year. This has led to an improvement of 1137 basis points in operating margin to 14.28 percent.
Operating income for the quarter was $52.83 million, compared with $9.37 million in the previous year period.
However, the adjusted operating income for the quarter stood at $68.25 million compared to $28.27 million in the prior year period. At the same time, adjusted operating margin improved 965 basis points in the quarter to 18.45 percent from 8.80 percent in the last year period.
"I am pleased to announce that Finisar achieved all-time quarterly records for revenues and profits in our second quarter. Revenues were $369.9 million, an increase of $28.5 million, or 8.4% over the first quarter. This growth was primarily driven by strong demand for 100G transceivers. In addition, customer demand for wavelength selective switch and ROADM line card products was strong. Our gross margins improved significantly due to a favorable product mix and leverage achieved from our vertical integration with larger volumes. The combination of revenues being at the higher end of our guidance range with higher gross margins resulted in earnings per fully diluted share above our guidance range," said Jerry Rawls, Finisar's chief executive officer.
For the third-quarter, Finisar Corp forecasts revenue to be in the range of $378 million to $398 million. It forecasts adjusted operating income to grow in the range of 18.50 percent to 19.50 percent. It expects diluted earnings per share to be in the range of $0.58 to $0.64 on an adjusted basis for the same period.
Working capital increases
Finisar Corp has recorded an increase in the working capital over the last year. It stood at $1,010.74 million as at Oct. 30, 2016, up 18.16 percent or $155.31 million from $855.42 million on Nov. 01, 2015. Current ratio was at 5 as on Oct. 30, 2016, up from 4.88 on Nov. 01, 2015.
Cash conversion cycle (CCC) has decreased to 74 days for the quarter from 131 days for the last year period. Days sales outstanding went down to 74 days for the quarter compared with 77 days for the same period last year.
Days inventory outstanding has decreased to 56 days for the quarter compared with 107 days for the previous year period. At the same time, days payable outstanding went up to 56 days for the quarter from 53 for the same period last year.
Debt moves up marginally
Finisar Corp has witnessed an increase in total debt over the last one year. It stood at $234.68 million as on Oct. 30, 2016, up 3.77 percent or $8.53 million from $226.15 million on Nov. 01, 2015. Total debt was 13.41 percent of total assets as on Oct. 30, 2016, compared with 14.34 percent on Nov. 01, 2015. Debt to equity ratio was at 0.19 as on Oct. 30, 2016, down from 0.20 as on Nov. 01, 2015. Interest coverage ratio improved to 17.46 for the quarter from 3.21 for the same period last year.
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