Finisar Corporation (FNSR) has reported a 283.87 percent jump in profit for the quarter ended Jan. 29, 2017. The company has earned $46.39 million, or $0.40 a share in the quarter, compared with $12.08 million, or $0.11 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $67.20 million, or $0.59 a share compared with $26.60 million or $0.25 a share, a year ago.
Revenue during the quarter grew 23.09 percent to $380.59 million from $309.21 million in the previous year period. Gross margin for the quarter expanded 753 basis points over the previous year period to 35.90 percent. Total expenses were 85.57 percent of quarterly revenues, down from 96.62 percent for the same period last year. This has led to an improvement of 1104 basis points in operating margin to 14.43 percent.
Operating income for the quarter was $54.91 million, compared with $10.46 million in the previous year period.
However, the adjusted operating income for the quarter stood at $70.38 million compared to $26.31 million in the prior year period. At the same time, adjusted operating margin improved 998 basis points in the quarter to 18.49 percent from 8.51 percent in the last year period.
"I am pleased to announce that Finisar achieved another new all-time quarterly records for revenues and Non-GAAP profits in our third quarter. Revenues were $380.6 million, an increase of $10.7 million, or 2.9%, over the second quarter and 23.1% over the third quarter a year ago. This growth was primarily driven by strong demand for 100G transceivers. In addition, customer demand for wavelength selective switch and ROADM line card products continued to be strong," said Jerry Rawls, Finisar's chief executive officer.
For the fourth-quarter 2017, Finisar Corporation expects revenue to be in the range of $360 million to $380 million. The company expects adjusted operating income to grow at 17 percent. On an adjusted basis, the company projects diluted earnings per share to be in the range of $0.50 to $0.56.
Working capital increases sharply
Finisar Corporation has recorded an increase in the working capital over the last year. It stood at $1,621.06 million as at Jan. 29, 2017, up 84.06 percent or $740.35 million from $880.71 million on Jan. 31, 2016. Current ratio was at 7.13 as on Jan. 29, 2017, up from 4.97 on Jan. 31, 2016.
Cash conversion cycle (CCC) has decreased to 77 days for the quarter from 135 days for the last year period. Days sales outstanding went down to 73 days for the quarter compared with 81 days for the same period last year.
Days inventory outstanding has decreased to 58 days for the quarter compared with 108 days for the previous year period. At the same time, days payable outstanding was almost stable at 54 days for the quarter, when compared with the previous year period.
Debt increases substantially
Finisar Corporation has witnessed an increase in total debt over the last one year. It stood at $699.90 million as on Jan. 29, 2017, up 206.22 percent or $471.34 million from $228.56 million on Jan. 31, 2016. Finisar Corporation has witnessed an increase in long-term debt over the last one year. It stood at $699.90 million as on Jan. 29, 2017, up 206.22 percent or $471.34 million from $228.56 million on Jan. 31, 2016. Total debt was 29.26 percent of total assets as on Jan. 29, 2017, compared with 14.31 percent on Jan. 31, 2016. Debt to equity ratio was at 0.49 as on Jan. 29, 2017, up from 0.20 as on Jan. 31, 2016. Interest coverage ratio improved to 10.17 for the quarter from 3.57 for the same period last year.
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