Shares of Finisar Corp. traded sharply lower Friday after the company posted a fourth-quarter loss and said it expected 2009 revenue to come in below Wall Street expectations.
The stock fell 14 cents, or 8 percent, to $1.62.
After the close of trading Thursday, Finisar, which makes components for wireless networks, said its quarterly loss narrowed nearly by half to $8.7 million, or 3 cents per share. The results met the average estimate from analysts polled by Thomson Financial.
In a conference call with analysts Thursday, the Sunnyvale, Calif., company said it expected full-year revenue between $485 million and $500 million. Wall Street is expecting revenue of $514.4 million, on average.
Finisar also guided for first-quarter revenue of between $120 million and $125 million, while analysts forecast $120.6 million.
Piper Jaffray analyst Troy D. Jensen praised Finisar's "strong" fourth-quarter results in a note to investors Friday. But its lower-than-expected 2009 outlook and its recent acquisition of Optium Corp. prompted him to downgrade the company.
"The company's acquisition of Optium creates a substantial integration risk, especially since the company has never made an acquisition of this size before," he said, cutting Finisar to "Neutral" from "Buy." He also lowered his price target to $1.75 from $2.
On May 16, both companies said Finisar will buy Optium in a $212 million all-stock buyout. The price represents a 2 percent premium to Optium's May 15 closing price.
In an interview, Finisar's Chief Financial Officer Steve Workman said the company has completed 16 acquisitions in the past several years, and while the Optium deal is its largest yet, it is not its most difficult.
"This is a very complimentary merger thats being proposed," Workan said. "Very little overlap. I don't think there's a lot of revenue risk here."
Shares of Optium lost $1.07, or 9.8 percent, to $9.77 in midday trading.
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