cien followed up its upbeat fiscal Q2 report with a more muted fiscal Q3 report this morning. Revenues came in at $474.1M, toward the upper end of guidance and a hair above analyst expectations, while adjusted loss per share of $0.04 was slightly below expectations. It’s probably the Q4 revenue guidance that will attract the most eyes though, coming in light. Here’s a quick table in some context.
| $ in millions | FQ3/11 | FQ4/12 | FQ1/12 | FQ2/12 | FQ3/12 | FQ4/12(guidance) |
|---|---|---|---|---|---|---|
| -Packet-Optical Transport | 266.5 | 296.2 | 266.3 | 318.0 | 298.5 | |
| -Packet-Optical Switching | 40.7 | 41.2 | 43.4 | 31.0 | 37.8 | |
| -Carrier Ethernet Solutions | 40.5 | 28.8 | 21.9 | 30.6 | 31.3 | |
| -Software and Services | 87.6 | 89.3 | 85.1 | 98.0 | 106.5 | |
| Revenue | 435.3 | 455.5 | 416.7 | 477.6 | 474.1 | 455-480 |
| Adj. OPEX | 175.2 | 180.8 | 175.4 | 172.9 | 175.6 | low 180s |
| Adj. GM% | 44.1% | 43.2% | 41.9% | 39.6% | 39.6% | ~40% |
| Adj. EPS | 0.08 | -0.14 | -0.17 | 0.04 | -0.04 |
Sequential growth in packet-optical switching and software/services were not quite enough to offset the lower transport number. On the other hand, opex remained below $180M. Guidance for revenue of $455-480M in fiscal Q4 was below the $499.5M composite analyst estimate on Yahoo Finance.
Ciena blamed the lack of fireworks on the sluggish economy. According to CEO Gary Smith:
“We are experiencing the effects of ongoing macroeconomic challenges and slower than expected roll-outs of new design wins. However, our approach to the market is working, our OPn architecture vision is gaining traction with customers globally, and our view of the long-term opportunity is unchanged.”
The stock is down in premarket trading, we’ll see how the day goes though.
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I was expecting better guidance too.