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.
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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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.
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%.
5 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2018 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs. A bonus Zacks Special Report names this breakthrough and the 5 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains.
Click to see them right 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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