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Ciena (CIEN) Q3 Earnings Beat Estimates, Revenues Up Y/Y

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Ciena Corporation (CIEN - Free Report) reported better-than-expected results in third-quarter fiscal 2018 (ended Jul 31, 2018).

Net Income

On a GAAP basis, net income for the reported quarter came in at $50.8 million or 34 cents per share compared with $60 million or 39 cents per share in the year-ago quarter. The year-over-year decrease was primarily attributable to increase in cost of goods sold.

Ciena Corporation Price, Consensus and EPS Surprise

Ciena Corporation Price, Consensus and EPS Surprise | Ciena Corporation Quote

Non-GAAP net income was $74.3 million or 48 cents per share compared with $56.4 million or 35 cents per share in the year-ago quarter. Notably, the bottom line beat the Zacks Consensus Estimate of 35 cents.

Revenues

Quarterly total revenues increased 12.4% year over year to $818.8 million, driven by continued growth in APAC (Asia Pacific) service providers and global webscale customers. Notably, India’s quarterly revenues were up an impressive 100%.

Also, the top line surpassed the Zacks Consensus Estimate of $791.72 million.

Operating Metrics

Gross margin was 42.9% compared with 45% in the year-ago quarter. Operating expenses were $266.3 million compared with $246.1 million a year ago. Operating margin was 10.4% compared with 11.3% in the prior-year quarter.

Adjusted EBITDA was $136.1 million, up from $122.8 million.

Segmental Performance

Revenues from Networking Platforms increased 14.4% year over year to $677.4 million. Software and Software-Related Services revenues were $41.2 million compared with $42.3 million in the prior-year quarter. Revenues from Global Services were $100.2 million compared with $94.1 million a year ago.

Share Repurchases

During the quarter, Ciena repurchased approximately 1.4 million shares of common stock for an aggregate amount of $35.6 million.

Cash Flow

During the quarter, Ciena generated $88.1 million as cash from operating activities while its free cash flow amounted to $69.7 million. Cash flow for the first nine months of fiscal 2018 improved to $161.2 million from $96.3 million in the prior-year period.

Liquidity

As of Jul 31, 2018, Ciena had $726.2 million of cash and cash equivalents and $586.5 million of net long-term debt.

The company ended the quarter with approximately $985 million in cash and investments.

Zacks Rank & Stocks to Consider

Ciena currently has a Zacks Rank #3 (Hold).

Some better-ranked stocks are AVX Corporation , Avnet, Inc. (AVT - Free Report) and AMETEK, Inc. (AME - Free Report) . While AVX sports a Zacks Rank #1 (Strong Buy), Avnet and AMETEK carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

AVX surpassed estimates twice in the trailing four quarters with an average beat of 26.39%.

Avnet exceeded estimates in each of the trailing four quarters with an average beat of 5.92%.

AMETEK surpassed estimates in each of the trailing four quarters with an average beat of 6.42%.

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