Ciena Corporation (CIEN - Free Report) is slated to report third-quarter fiscal 2020 results (ended Jul 31, 2020) on Sep 3, before the opening bell. In the last reported quarter, the company delivered a positive earnings surprise of 49%. The bottom line beat the Zacks Consensus Estimate by 25 cents.
The Hanover, MD-based networking systems, services and software company is expected to have recorded slightly higher revenues year over year. Despite a challenging environment, Ciena’s performance is likely to have benefited from the proper execution of its strategy that centers on innovation, diversification and global scale.
Let’s discuss the factors that are likely to get reflected in the upcoming quarterly announcement.
Factors at Play
During the quarter under review, Telia Carrier — a leading network service provider — deployed an integrated C&L-Band photonic line system from Ciena. Deutsche Telekom Global Carrier, the international wholesale unit of Deutsche Telekom, selected Ciena’s WaveLogic 5 Extreme (WL5e) — the industry’s first 800G programmable solution — to meet increasing traffic requirements across its pan-European network.
Ciena’s technology was deployed by Telefonica UK to migrate legacy traffic onto a new packet network capable of supporting 5G, IoT and other next-generation applications. Vodafone New Zealand advanced its network by deploying 800G technology using Ciena’s WL5e coherent optics between its data centers in Auckland.
Sparkle, TIM Group’s fully-owned global operator and the first international service provider in Italy, adopted Ciena’s WL5e to upgrade its 10,476 km fibers on the Curie submarine cable. Ciena was selected by Spark, a New Zealand-based telecommunications company, to provide hardware, software and services to build Spark’s Optical Transport Network (OTN 2). These developments are likely to have had a positive impact on Ciena’s fiscal third-quarter top line.
The Zacks Consensus Estimate for aggregate revenues is pegged at $972 million that indicates a rise of 1.1% from the year-ago quarter’s reported figure. Adjusted earnings per share are pegged at 83 cents, which calls for growth of 16.9% from the prior-year quarter’s recorded figure.
What Our Model Says
Our proven model doesn’t conclusively predict an earnings beat for Ciena this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Ciena’s Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00% as both are pegged at 83 cents.
Zacks Rank: Ciena carries a Zacks Rank #3, at present.
Stocks to Consider
Here are some companies that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter.
Campbell Soup Company (CPB - Free Report) is slated to release fourth-quarter fiscal 2020 results on Sep 3. It has an Earnings ESP of +1.67% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Signet Jewelers Limited (SIG - Free Report) is scheduled to release second-quarter fiscal 2021 results on Sep 3. The company has an Earnings ESP of +38.82% and a Zacks Rank #3.
Patterson Companies, Inc. (PDCO - Free Report) has an Earnings ESP of +19.78% and a Zacks Rank of 3. The company is set to report first-quarter fiscal 2021 results on Sep 3.
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