Finisar Updates Expectations

SUNNYVALE, Calif. -- Finisar Corporation(NASDAQ: FNSR), a technology leader in gigabit fiber optic solutionsfor high-speed data networks, today reported that revenues for itsfourth fiscal quarter ended April 30, 2007 would be approximately $97million, as compared to its original guidance of $104 to $110million. Revenues related to the sale of the Company's opticalsubsystems during the quarter are expected to total approximately $88million with an additional $9 million in revenues from the sale ofits network testing and monitoring products. Finisar reportedrevenues of $107.5 million for the third quarter ended January 28,2007 and $102.4 million for the fourth quarter of the previous fiscalyear. The shortfall in revenues from the Company's earlier forecastwas due in partto:

-- The impact of a transition by two customers to "lean inventory" arrangements during the quarter whereby demand for the Company'sproducts is reduced in conjunction with implementing lower levels of inventory at these customer locations; and

-- The continued utilization by certain customers of excess inventories of products designed for LAN/SAN applications which adversely affected demand during the quarter.

These factors combined to reduce revenues from the sale of opticalsubsystems in the fourth quarter by approximately $6 million ascompared to the Company's earlier guidance. The Company further notedthat revenues from the sale of optical subsystems for 10-40 Gb/sapplications would total $14 to $15 million for the fourth quarter,in line with its original forecast of $14 to $17 million. The Companyis not providing preliminary bottom-line financial guidance for thequarter at this time in light of the voluntary review of itshistorical stock option granting practices and associated accountingimpact, which is ongoing.

The Company's updated expectations for fourth quarter revenues wouldmean total revenues for the fiscal year ended April 30, 2007 wouldtotal approximately $419 million, up 15% from $364.3 million in theprior fiscal year.Finisar Corp.