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Finisar Updates Expectations

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

-- The impact of a transition by two customers to "lean inventory"
arrangements during the quarter whereby demand for the Company's
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 optical
subsystems in the fourth quarter by approximately $6 million as
compared to the Company's earlier guidance. The Company further noted
that revenues from the sale of optical subsystems for 10-40 Gb/s
applications would total $14 to $15 million for the fourth quarter,
in line with its original forecast of $14 to $17 million. The Company
is not providing preliminary bottom-line financial guidance for the
quarter at this time in light of the voluntary review of its
historical stock option granting practices and associated accounting
impact, which is ongoing.

The Company's updated expectations for fourth quarter revenues would
mean total revenues for the fiscal year ended April 30, 2007 would
total approximately $419 million, up 15% from $364.3 million in the
prior fiscal year.

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