Ciena Corporation (CIEN - Free Report) reported lackluster fourth-quarter fiscal 2020 (ended Oct 31, 2020) results, wherein the bottom line missed the Zacks Consensus Estimate.
The Hanover, MD-based networking systems and software company expects the challenging market conditions to persist in the near term.
Net Income
On a GAAP basis, net income in the quarter was $65 million or 42 cents per share compared with $80.3 million or 51 cents per share in the year-ago quarter. The deterioration resulted from a higher provision for income tax.
Adjusted net income came in at $94.5 million or 60 cents per share compared with $90.4 million or 58 cents per share in the prior-year quarter. The bottom line missed the Zacks Consensus Estimate by 4 cents.
In fiscal 2020, GAAP net income was $361.3 million or $2.32 per share compared with $253.4 million or $1.61 per share in fiscal 2019.
Revenues
Quarterly total revenues fell 14.4% year over year to $828.5 million, primarily due to a slowdown in orders caused by the pandemic. The top line matched the consensus estimate.
Region-wise, revenues in the Americas were $531.6 million, down 25.7% year over year. Revenues in Europe, Middle East and Africa were $157.6 million, up from $153 million. Asia-Pacific revenues totaled $139.3 million, up 40.3%.
In fiscal 2020, revenues declined 1.1% year over year to $3,532.2 million.
Quarterly Segment Results
Total revenues in Networking Platforms decreased 20.4% year over year to $635.3 million. Platform Software and Services revenues were $54.5 million compared with $41.2 million in the prior-year quarter. Blue Planet Automation Software and Services revenues increased from $16.6 million to $20.9 million. Total revenues in Global Services were $117.8 million, up 4.7%.
Other Details
Adjusted gross margin was 49.5% compared with 43.8% in the year-ago quarter. Adjusted operating expenses were $278.9 million, down from $295.3 million. Operating income improved to $93.5 million from $93.2 million. Adjusted operating income increased to $130.9 million from $129.2 million. The adjusted operating margin came in at 15.8% compared with 13.3% in the prior-year quarter. Adjusted EBITDA was $154.5 million, up from $151.6 million.
The company stated that it will be reinstituting the share repurchase program in the first quarter of 2021. It is targeting repurchases of $150 million in fiscal 2021.
Cash Flow & Liquidity
In fiscal 2020, Ciena generated $493.7 million of net cash from operating activities compared with $413.1 million in fiscal 2019.
As of Oct 31, the company had $1,088.6 million in cash and cash equivalents with $676.4 million of net long-term debt compared with the respective tallies of $904 million and $680.4 million a year ago.
Zacks Rank & Stocks to Consider
Ciena currently has a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the broader industry are Plantronics , United States Cellular (USM - Free Report) and NIC , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Plantronics delivered a trailing four-quarter positive earnings surprise of 568.2%, on average.
U.S. Cellular delivered a trailing four-quarter positive earnings surprise of 231.1%, on average.
NIC delivered a trailing four-quarter positive earnings surprise of 27.5%, on average. The company’s earnings beat the Zacks Consensus Estimate in two of the last four quarters.
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Ciena Corporation (CIEN - Free Report) reported lackluster fourth-quarter fiscal 2020 (ended Oct 31, 2020) results, wherein the bottom line missed the Zacks Consensus Estimate.
The Hanover, MD-based networking systems and software company expects the challenging market conditions to persist in the near term.
Net Income
On a GAAP basis, net income in the quarter was $65 million or 42 cents per share compared with $80.3 million or 51 cents per share in the year-ago quarter. The deterioration resulted from a higher provision for income tax.
Adjusted net income came in at $94.5 million or 60 cents per share compared with $90.4 million or 58 cents per share in the prior-year quarter. The bottom line missed the Zacks Consensus Estimate by 4 cents.
In fiscal 2020, GAAP net income was $361.3 million or $2.32 per share compared with $253.4 million or $1.61 per share in fiscal 2019.
Revenues
Quarterly total revenues fell 14.4% year over year to $828.5 million, primarily due to a slowdown in orders caused by the pandemic. The top line matched the consensus estimate.
Region-wise, revenues in the Americas were $531.6 million, down 25.7% year over year. Revenues in Europe, Middle East and Africa were $157.6 million, up from $153 million. Asia-Pacific revenues totaled $139.3 million, up 40.3%.
In fiscal 2020, revenues declined 1.1% year over year to $3,532.2 million.
Quarterly Segment Results
Total revenues in Networking Platforms decreased 20.4% year over year to $635.3 million. Platform Software and Services revenues were $54.5 million compared with $41.2 million in the prior-year quarter. Blue Planet Automation Software and Services revenues increased from $16.6 million to $20.9 million. Total revenues in Global Services were $117.8 million, up 4.7%.
Other Details
Adjusted gross margin was 49.5% compared with 43.8% in the year-ago quarter. Adjusted operating expenses were $278.9 million, down from $295.3 million. Operating income improved to $93.5 million from $93.2 million. Adjusted operating income increased to $130.9 million from $129.2 million. The adjusted operating margin came in at 15.8% compared with 13.3% in the prior-year quarter. Adjusted EBITDA was $154.5 million, up from $151.6 million.
The company stated that it will be reinstituting the share repurchase program in the first quarter of 2021. It is targeting repurchases of $150 million in fiscal 2021.
Cash Flow & Liquidity
In fiscal 2020, Ciena generated $493.7 million of net cash from operating activities compared with $413.1 million in fiscal 2019.
As of Oct 31, the company had $1,088.6 million in cash and cash equivalents with $676.4 million of net long-term debt compared with the respective tallies of $904 million and $680.4 million a year ago.
Zacks Rank & Stocks to Consider
Ciena currently has a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the broader industry are Plantronics , United States Cellular (USM - Free Report) and NIC , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Plantronics delivered a trailing four-quarter positive earnings surprise of 568.2%, on average.
U.S. Cellular delivered a trailing four-quarter positive earnings surprise of 231.1%, on average.
NIC delivered a trailing four-quarter positive earnings surprise of 27.5%, on average. The company’s earnings beat the Zacks Consensus Estimate in two of the last four quarters.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.4% per year.
These 7 were selected because of their superior potential for immediate breakout.
See these time-sensitive tickers now >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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