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News Breaks
June 13, 2014
11:31 EDTFNSR, OPLK, OCLR, CIEN, JNPRFinisar plummets after profit, gross margin outlook trail estimates
Shares of Finisar (FNSR), which provides optical subsystems and components for telecommunication applications, are sinking after the company’s first quarter profit and gross margin outlook trailed analysts’ consensus estimates. WHAT'S NEW: Last night, Finisar reported fourth quarter earnings per share of 36c and revenue of $306M, compared to the consensus views of 38c and $303.2M, respectively. The company said Q4 adjusted gross margins decreased to 34.2% from 37.2%. Finisar attributed the decline in Q4 adjusted gross margin primarily to the impact of the full three months of the annual price reductions for telecom products, as well as the impact of the u2t acquisition whose products carry a lower gross margin than the corporate average. WHAT’S NOTABLE: Finisar forecast Q1 EPS of 30c-34c, far short of the consensus of 41c. Q1 revenue was seen at $320M-$335M, versus consensus of $316.96M. The company expects its gross margin issue to last beyond the current quarter. It attributes the reduction in gross margin to the product mix with lower margin wireless products, noting that it sold "a lot more" wireless transceivers for wireless applications than originally expected. Finisar noted that the wireless products have lower than average gross margins and that it will continue to pursue the "wireless opportunity" in spite of lower margins. Finisar sees its product mix in the near term to be relatively similar to what it is seeing in this quarter. ANALYST REACTION: This morning, analyst commentary was mixed. Research firms Piper Jaffray and Raymond James both said weakness in Finisar was a buying opportunity, however each lowered their respective price targets on the shares. Another firm, Craig-Hallum, downgraded Finisar to Hold from Buy. PRICE ACTION: In late morning trading, Finisar fell $5.46, or about 21.5%, to $19.80 on nearly eight times its average daily trading volume. Despite today’s pull back, the stock has gained approximately 35% over the past twelve months. OTHERS TO WATCH: Other companies that provide telecommunication components include Oplink Communications (OPLK), Oclaro (OCLR), Ciena (CIEN), and Juniper Networks (JNPR).
News For FNSR;OPLK;OCLR;CIEN;JNPR From The Last 14 Days
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September 24, 2014
09:04 EDTOPLKOplink Communications issues statement in response to Engaged Capital, Voce
Oplink Communications issued the following statement in response to a press release issued on September 23 by Engaged Capital and Voce Capital Management: "Oplink is focused on execution and delivering value for shareholders. We delivered strong fiscal fourth quarter results and are confident in the continued performance of our core optical business. In July, the company announced a number of initiatives to further enhance shareholder value, including evaluating strategic alternatives for the Oplink Connected business; the authorization of a $40M increase to its existing share repurchase program; and the initiation of a quarterly dividend to shareholders. We also announced plans to expand our board by up to two members in order to add further industry experience. We have clearly expressed our willingness to consider Engaged and Voce's nominees and invited them to meet with our Special Nominating Committee, as reflected in the letter included below, sent on September 4. They have thus far refused our good faith efforts to have them participate in our process. We continue to be open to constructive conversations and are disappointed that Engaged and Voce have chosen to pursue their agenda in this manner." At this time, no action by Oplink shareholders is required. The company will continue to communicate with its shareholders as appropriate and encourages them to review Oplink's proxy materials when they become available.
September 23, 2014
09:28 EDTJNPRJuniper views raised to Positive from Neutral at OTR Global
08:13 EDTOPLKOplink Shareholders for Change files preliminary proxy materials
Oplink Shareholders for Change, a group led by Engaged Capital and Voce Capital Management, who together with the other participants in their solicitation collectively own approximately 6.9% of the outstanding shares of Oplink Communications, has filed preliminary proxy materials with SEC seeking the election of Jeffrey S. McCreary and J. Daniel Plants to Oplink’s Board of Directors at the company’s upcoming annual meeting of shareholders. In addition, OSC released a letter sent to the Board on September 8. In its letter, OSC reiterated its desire to work with the Board to add directors with the skills and expertise necessary to create lasting value for Oplink shareholders. OSC has received no response from the Board to its letter or its previous offers to negotiate. “OSC has repeatedly offered to negotiate in good faith to reconstitute the Board with individuals possessing the expertise and independence necessary to execute upon the strategic review of the Oplink Connected business and determine the best use of Oplink’s excess capital, decisions which have the potential to materially impact the value of Oplink’s shares” said Glenn Welling, Principal and CIO of Engaged Capital. “We are troubled by the fact that the Board has failed to provide OSC with any meaningful response to our invitations. Shareholders cannot afford to leave these important decisions in the hands of conflicted, over-tenured directors. The Board’s negligent oversight of capital allocation and corporate strategy belies a concerning lack of sophistication and independence among the incumbent Board members,” continued Mr. Welling. “OSC’s nominees Jeffrey S. McCreary and J. Daniel Plants each possess the skills and experience to help Oplink set a new strategic course. We call on the Board to cease postponing the inevitable and immediately call the annual meeting of shareholders. It is time this Board allows the independent shareholders a voice in the boardroom.”
05:23 EDTOCLROclaro increases investment in 100G manufacturing capacity
Oclaro announced it is increasing investment in 100G manufacturing capacity to support the growing demand of 100G client-side pluggable optics. This increased investment has been driven by the company's successful introduction of 100G client side interfaces in the CFP/CFP2 form factors, and will enable Oclaro to support the existing 100G form factors along with higher density form factors that will be shipping in 2015 and beyond. Complementing this announcement, Oclaro also announced today its second-generation CFP2 transceiver, which has been sampling to key customers and is expected to enter volume production in Q4.
September 19, 2014
07:23 EDTJNPRFCC to hold a roundtable
Open Internet Roundtable: Technological Aspects will consider the technical aspects of ensuring an Open Internet, including questions of scope, transparency, blocking, mobile networks, and reasonable network management and is being held at FCC Washington, D.C. offices on September 19 at 1:30 pm. Webcast Link
September 18, 2014
11:56 EDTFNSRFinisar management to meet with Barrington
Meetings to be held in Portland, OR on September 23 and in Seattle on September 24 hosted by Barrington.

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