Finisar Corp. (FNSR) slipped to a loss in the second quarter from a profit last year, due to lower revenues and an increase in costs and expenses. The results were also hurt by iPhone orders cut and margin headwinds. The bottom line exceeded analysts’ expectations while the top line missed consensus estimates. Following this, the stock inched down 0.64% in the premarket session.
Net loss was $5.28 million or $0.04 per share compared to a profit of $5.86 million or $0.05 per share in the previous year quarter. Adjusted earnings jumped 13% to $0.26 per share.
Revenues declined 2% to $325.4 million. This was due to lower sales of wavelength selective switches and VCSEL arrays for 3D applications.
In comparison to the previous quarter, revenue rose by 2.5% on higher sales of wavelength selective switches and VCSEL arrays for 3D applications. Gross margin improved to 26.3% from 25.4% last quarter, on favorable product mix and continued focus on reducing manufacturing overhead.
Operating expenses fell to 27.6% of revenue from 30.4% in the first quarter of fiscal 2019. The company was able to accelerate the process of improving efficiencies and reducing relative operating expense levels faster than expected.
Cash, cash equivalents and short-term investments increased about $11 million from the prior quarter. This is despite the higher than typical levels of capital expenditures associated with the continued progress on its new Sherman fab for VCSEL arrays for 3D sensing applications and the construction of the third building at its Wuxi, China manufacturing site.
Finisar will not hold an earnings call, nor provide forward guidance for the third quarter of fiscal 2019, due to the previously announced proposed acquisition by II-VI Inc. (IIVI).
Shares of Finisar ended Friday’s regular session up 2.23% at $23.35 on the Nasdaq. The stock has risen over 14% in the year so far and over 21% in the past year.