Ciena Skyrockets After Smashing Earnings Results

12:16 06/07/2019

Optical gear maker Ciena CIEN  saw its shares skyrocket on Thursday after the company reported fiscal second-quarter earnings and revenue that beat what Wall Street was expecting.

Shares were up almost 27% at the close on Thursday.

For the quarter ended April 30th, Ciena reported adjusted earnings of 48 cents a share. This represented a growth of 109% compared to a year ago. Revenue saw a growth of 18.5% to $865 million, which was compared to revenue of $730 million a year earlier. Analysts had been waiting for earnings per share of 41 cents and revenue of $819 million.

President and Chief Executive Gary B. Smith said on the earnings call, 'We reported a very strong quarter across all of our financial and performance metrics. This included revenue growth in all major product segments and customer verticals. This reflects our balanced growth and continued market share gains. Order flow significantly exceeded revenue in the quarter, giving a strong visibility and increased confidence across our business. This performance is driven by the combination of our outstanding execution of a very deliberate and long-term strategy, as well as favorable competitive dynamics. Specifically, we consistently achieve technology leadership across our portfolio and continue to build a diversified customer base in high growth markets, all at global scale and with deep customer relationships.'

He continued, 'As a result, we continue to outpace the competition across multiple dimensions. And we believe that we represent the strongest and most stable partner to customers around the world. This combination in turn is driving consistent and differentiated financial performance, including better than expected performance in Q2, and is enabling us to significantly increase our revenue outlook for the remainder of the year.'

He added, 'Over the past few years, there have been several notable shifts happening in the communications industry, including evolutions in network design and technology, as well as changes to the profiles of the customer base on the competitive landscape. Our Q2 results illustrate the very positive impact on our business of how these shifts are playing out today for Ciena.

Specifically, demand for capacity in its various forms remains robust across our customer segments, geographies and market verticals. And we are intensely focused on executing and delivering on this robust demand. Also, the industry structure continues to currently redefined really by a flight to quality, where customers are more intently seeking out vendors who offer leading innovation and engagement models, and who have the financial strength and sustainability to deliver on these over the long-term.'

'Management expects fiscal 2019 sales growth 13% to 14%, up from near 8% previously, led by its technology advantages, diversified customer base, early 5G initiatives and market share gains,' said Simon Leopold, a Raymond James analyst in a report.

It was in March that shares of Ciena had touched an 11-year high after reporting first quarter financial results.

This article has been provided by a Chasing Markets contributor. All content submitted by this author represent their personal opinions, and should be considered as such for entertainment purpose only. All opinions expressed are those of the writer, and may not necessarily represent fact, opinions, or bias of Chasing Markets.
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