Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



So Much for the Death of Optical Networking

Don't let it get away!

Keep track of the stocks that matter to you.

Help yourself with the Fool's FREE and easy new watchlist service today.

The results for the last of the optical networking majors are in, and it's good news.

Finisar (Nasdaq: FNSR  ) just released preliminary sales and earnings for the second quarter, and they're both stronger than expected. Sales will land at roughly $240 million, and earnings should come in at $0.42 per share, give or take a penny. The optical components maker thus underscores the message from industry peer JDS Uniphase (Nasdaq: JDSU  ) last week: Optical networking is still a strong industry, and rival Oclaro's (Nasdaq: OCLR  ) problems are unique to that company.

Finisar's good news is dragging Oclaro and Oplink Communications (Nasdaq: OPLK  ) along on the ride for some nice intraday gains, deserved or not.

Looking beyond the second quarter, Finisar expects the growth story to continue into the third. However, if the second quarter ends up at the bottom end of the preliminary report and the third at the top end of guidance, the sequential revenue gain between the two would land just below the 10% mark and snap an impressive streak of six quarter-by-quarter improvements above that benchmark.

That would still be an impressive result, of course. It's just kind of sad to see long streaks of success coming to an end, however arbitrarily defined. Yeah, I'm a big softie.

So what's next for Finisar after pushing its share price 137% above the year-ago mark? The stock is trading at a forward P/E in the teens, though that might be subject to change as analysts adjust their expectations. That isn't terribly expensive for a company of Finisar's growth habits. Assuming that the growth trend in optical networking has legs, which I do, it's not hard to imagine further growth from this important cog in the sector's machinery.

I'm heading over to CAPS to slap an "outperform" rating on Finisar for the next couple of years. You're welcome to follow along if you like, or drop down to the comments box to tell me why I shouldn't go there.

All Star CAPS player and Fool contributor Anders Bylund holds no position in any of the companies discussed here. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.

Read/Post Comments (0) | Recommend This Article (7)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1368240, ~/Articles/ArticleHandler.aspx, 10/24/2016 1:38:30 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 2 days ago Sponsored by:
DOW 18,145.71 -16.64 -0.09%
S&P 500 2,141.16 -0.18 -0.01%
NASD 5,257.40 15.57 0.30%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/21/2016 4:00 PM
FNSR $29.16 Down -0.52 -1.75%
Finisar CAPS Rating: ***
OCLR $8.07 Down -0.01 -0.12%
Oclaro CAPS Rating: **
OPLK.DL $0.00 Down +0.00 +0.00%
Oplink Communicati… CAPS Rating: ***
VIAV $7.19 Down -0.10 -1.37%
Viavi Solutions CAPS Rating: ***