Got this from Extiee at yahoo board..tks
Finisar
(FNSR-$0.70-Cap $150M-PT $0.90- Underperform) Max Schuetz
Meeting with Management: Cautious Outlook, Focused on Cash FY02: ($0.22), FY03: ($0.20)
* We met with Finisar CEO Jerry Rawls yesterday. Our discussions covered demand outlook, competition and pricing, and Finisar’s restructuring efforts.
* Near term demand remains weak. The co. reiterated its view that many of its customer purchasing plans are running below FNSR’s expectations, given the customers’ public financial proj. This would imply either customer inv., share loss by FNSR (mgmt thought both of these unlikely), or cust. expectations of an end-of-q acceleration, which is not materializing.
* Q on track. FNSR mgmt believes it is on track to meet its $44-48M sales guidance for Oct. on a slight increase in units and a slight decline in pricing. We believe there is still risk.
* Mgmt expects growth to resume in Dec Q based on conversations with cust’s. Mgmt also est’s 30% LT annual rev growth for FNSR on 10-20% pricing declines and 40-50% unit growth.
* Finisar commented that its tier-1 competitors (Agilent, JDS Uniphase) are holding prices at relatively stable levels. Aggressive pricing is still seen from Infineon and some smaller vendors.
* Restructuring. We believe mgmt expects to announce a restructuring plan shortly to consolidate its 8 facilities, exit certain product areas, and bring break-even revenue to roughly $55M/q (from $70M/q) over the next two quarters. While impressed by this ambitious target, we need to see evidence of execution before the financing risk is out of the stock.
* Maintain Underweight; PT to $0.90 (EV of 1x C02 sales) on cont’d demand, financing risk
How many restructurrings is it going to take before FNSR mgt gets clued in??? |
