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Finisar Stock Drops 6% as FYQ3, Outlook Miss on Telecom Weakness

Shares of optical component supplier Finisar dropped by 6% in late trading as its quarterly revenue was held back by softness in the telecom market, despite healthy business for its lasers that go into augmented reality, and the company forecast results this quarter below expectations.

Shares of fiber-optic component maker Finisar (FNSR) are down $1.30, or over 6%, at $18.92, in late trading, after the company this afternoon reported fiscal Q3 revenue and profit that slightly missed analysts’ expectations, and forecast this quarter’s results below consensus, saying its sales continue to be suppressed by weaker buying among telecom operators.

CEO Michael Hurlston said the company had seen "strong demand” for products including its "100G QSFP28 transceivers for datacenter” and for “VCSEL" laser arrays for "3D sensing,” where it competes with Lumentum Holdings (LITE) for business from Apple (AAPL) and other smartphone makers over time.

However, he said, "overall revenues for the third fiscal quarter only grew modestly to $332.4 million, as the growth from 100G QSFP28 and VCSEL arrays was offset by decline in revenue from telecom products, as well as lower revenues from our 40G QSFP and 100G CFP and CFP2 ethernet datacom transceivers.”

Revenue in the three months ended in January were roughly flat with the prior year at $332.4 million, yielding EPS of 20 cents, excluding some costs.

Analysts had, on average, been modeling $333 million in revenue and 23 cents per share in earnings.

For the current quarter, the company sees revenue in a range of $300 million $320 million, and EPS of 9 cents to 15 cents.  That compares to consensus for $332 million and 21 cents.