Ciena Posts Steady Quarter, But Market Unsatisfied

September 4th, 2014 by · 2 Comments

Ciena hit its numbers easily enough this morning, but the market doesn’t seem to like its guidance for the company’s fiscal Q4.  They’ve had a series of strong reports, I suppose it was inevitable that the bar would be raised too high.  Here is a quick summary in some context:

$ in millions FQ3/13 FQ4/13 FQ1/14 FQ2/14 FQ3/14 FQ4/14
-Converged Packet-Optical 302.0 350.9 333.4 356.8 382.0
-Packet Networking 61.6 61.2 51.7 66.5 69.5
-Optical Transport 66.2 52.6 40.1 29.6 31.0
-Software and Services 108.6 118.7 108.5 107.1 121.1
Revenue 538.4 583.4 533.7 560.0 603.6 570-610
Adj. OPEX 190.4 210.5 199.8 206.3 206.3 ~210
Adj. GM% 43.6% 40.8 43.4% 41.3% 44.3% high 30%s to low 40%s
Adj. EPS 0.23 0.16 0.13 0.17 0.32

Revenues of $603.6M were within the guided range and a touch higher than analyst estimates, while adjusted earnings per share of $0.32 were a few pennies above projections as well.

But the street was looking for a big fiscal Q4 with revenues in the $629M range, a number Ciena’s guidance of $570-610M fell rather short of.   According to the PR, fiscal Q4 will be “impacted by several significant variables that contribute to a broader range of potential outcomes for both revenue and gross margin than typically expected.”  That’s not very specific so I suppose we’ll have to wait for the call to get a bit more color.


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Categories: Financials · Telecom Equipment

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2 Comments So Far

  • Rob Powell says:

    The factors: incentives for an expanded AT&T relationship, international deployments in early, low margin stages, and new projects whose timing for revenues is unclear.

  • Rob Powell says:

    Looks like Ciena’s explanations have passed muster, the premarket has mostly turned around. The expanded AT&T domain 2.0 partnership surely can’t be a bad thing.

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