Shares of fiber optic cable manufacturer Finisar plunged more than 22 percent Friday, after the company announced disappointing forecasts for its current quarter.
Sunnyvale, C.A.-based Finisar said it expects fiscal fourth-quarter earnings to fall within 50 to 56 cents per share, compared to a Thomson Reuters forecast of 58 cents. Revenue is also expected to miss estimates, as Finisar predicts to make between $360 million to $380 million for the fourth quarter, falling short of a $393 million Reuters forecast. The stock closed for the week hovering slightly below $27.
Earnings for the latest quarter also missed expectations.
For its third quarter ended Jan. 29, Finisar reported sales of $380.6 million, below a $389.6 million Reuters consensus estimate. The firm reported adjusted earnings of 61 cents a share, also missing a Reuters estimate by a penny.
As of Friday morning, four brokerages cut their price targets on Finisar, with a median target of $39 a share, according to data from Thomson Reuters.
"We believe overall optical spending in China is still slow," analyst Jun Zhang of Rosenblatt Securities wrote in a Friday note to clients.
While Finisar doesn't break out its revenue by region, analysts know the company relies heavily on Chinese consumers, and one Goldman Sachs analyst wrote that "broader seasonality in China" hasn't boded well for much of Finisar's competition, such as Broadcom subsidiary Avago Technologies, CoAdna, and Lumentum.
With Friday's losses, shares of Finisar are down more than 10 percent for the year but are up over 90 percent in the past 12 months.
The stock hit an all-time intraday high of $493.83 a share in early 2000 during the tech bubble. Shares plunged to a record low of $1.69 during the financial crisis in 2009.