Ciena Finishes off Fiscal 2011

December 8th, 2011 by · Leave a Comment

Network equipment specialist Ciena (NASDAQ:CIEN, news, filings) gave us our latest window into how the equipment sector is faring as it reported its fiscal fourth quarter and full year 2011 results, which means up through the end of October.  It has now been 6 quarters since the company bought Nortel's MEN division and the second in a row that they reported positive adjusted earnings per share, although Ciena has been in the doghouse with investors since June's earnings report.  Here's a quick table of the relevant numbers in context:

 $ in millions FQ1/11 FQ2/11 FQ3/11 FQ4/11 FQ1/12(guidance)
 - Packet-Optical Transport 286.5 272.6 266.5 296.2
 - Packet-Optical Switching 35.3 31.3 40.7 41.2
 - Carrier Ethernet 27.6 30.9 40.5 28.8
 - Software & Services 83.9 83.1 87.6 89.3
 Total Revenues 433.3 417.9 435.3 455.5 435-455
 Adj. Operating Expenses 182.1 186.0 175.2 180.8 low 180s
 Adj. Gross Margin 41.8% 41.3% 44.1% 43.2% low 40s
 Adj. EPS (0.14)  (0.24) 0.08 0.03
 Headcount 4254 4301 4339  4339

Revenues:  Total revenues came in above the midpoint of guidance, beating analyst expectations of $450M.  Revenue growth was powered by the company's Packet-Optical Transport segment, which surged to $296.2M during the quarter.  Switching and Software/Services were up slightly sequentially while the company's Carrier Ethernet business pulled back.  Guidance for the fiscal first quarter of 2012 appears to be lighter than expected, which is probably not going to go over too well this morning but we shall see.

Margins & Earnings:  Margins were a bit better than guidance of the low 40's, but not quite up to last quarter's standards.  Guidance for next quarter is the same 'low 40s.  Meanwhile earnings per share stayed positive but fell sequentially to $0.03 - a bit below analyst composite estimates.  On the bright side, Ciena generated $30.8M in free cash flow.

In other comments, Ciena cited continuing macroeconomic uncertainty - something that will surprise absolutely nobody.

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Categories: Financials · Telecom Equipment

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