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Ciena (CIEN) Beats on Q3 Earnings, Stock Falls on Waning Orders
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Ciena Corporation (CIEN - Free Report) reported decent third-quarter fiscal 2020 results (ended Aug 1, 2020), with the top and the bottom line beating the respective Zacks Consensus Estimate.
But, shares tumbled as the Hanover, MD-headquartered networking systems and software company stated that orders slowdown due to the COVID-19 pandemic is likely to hurt revenues for a few quarters.
Net Income
On a GAAP basis, net income in the quarter was $142.3 million or 91 cents per share compared with $86.7 million or 55 cents per share in the year-ago quarter. The improvement resulted from higher operating income.
Adjusted net income came in at $166.4 million or $1.06 per share compared with $112.3 million or 71 cents per share in the prior-year quarter. The bottom line beat the Zacks Consensus Estimate by 23 cents.
Ciena Corporation Price, Consensus and EPS Surprise
Quarterly total revenues inched up 1.7% year over year to $976.7 million, reflecting the impact of orders slowdown caused by the pandemic. Ciena had one 10%-plus customer in the quarter, which represented 12% of revenues. The top line surpassed the consensus estimate of $972 million.
Region-wise, revenues in the Americas were $713.3 million, up 8.7% year over year. Revenues in Europe, the Middle East and Africa were $162.5 million, down from $169.5 million in the year-ago quarter. Asia-Pacific revenues totaled $100.9 million, down 25.1% year over year.
Segment Results
Total revenues in the Networking Platforms increased 0.8% year over year to $802.3 million. Platform Software and Services revenues were $46.4 million compared with $37.3 million in the prior-year quarter. Blue Planet Automation Software and Services revenues increased from $10.5 million to $11.3 million. Total revenues in Global Services were $116.7 million, flat year over year.
Other Details
The adjusted gross margin was 48.2% compared with 44.7% in the year-ago quarter. Adjusted operating expenses were $251.2 million, down from $273.2 million. Operating income improved to $188 million from $125.3 million. Adjusted operating income increased to $219.3 million from $156 million. The adjusted operating margin came in at 22.4% compared with 16.2% in the prior-year quarter. Adjusted EBITDA was $241.1 million, up from $178 million in the year-ago quarter.
Cash Flow & Liquidity
In the first nine months of fiscal 2020, Ciena generated $306.4 million of net cash from operating activities compared with $173.1 million in the prior-year period. As of Aug 1, the company had $1,093.7 million in cash and equivalents with $677.9 million of net long-term debt.
Turtle Beach has a trailing four-quarter earnings surprise of 41%, on average.
Vocera has a trailing four-quarter earnings surprise of 70%, on average. The company’s earnings beat the Zacks Consensus Estimate in three of the last four quarters.
Acacia has a trailing four-quarter earnings surprise of 17%, on average. The company’s earnings topped the consensus estimate in three of the last four quarters.
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Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
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Ciena (CIEN) Beats on Q3 Earnings, Stock Falls on Waning Orders
Ciena Corporation (CIEN - Free Report) reported decent third-quarter fiscal 2020 results (ended Aug 1, 2020), with the top and the bottom line beating the respective Zacks Consensus Estimate.
But, shares tumbled as the Hanover, MD-headquartered networking systems and software company stated that orders slowdown due to the COVID-19 pandemic is likely to hurt revenues for a few quarters.
Net Income
On a GAAP basis, net income in the quarter was $142.3 million or 91 cents per share compared with $86.7 million or 55 cents per share in the year-ago quarter. The improvement resulted from higher operating income.
Adjusted net income came in at $166.4 million or $1.06 per share compared with $112.3 million or 71 cents per share in the prior-year quarter. The bottom line beat the Zacks Consensus Estimate by 23 cents.
Ciena Corporation Price, Consensus and EPS Surprise
Ciena Corporation price-consensus-eps-surprise-chart | Ciena Corporation Quote
Revenues
Quarterly total revenues inched up 1.7% year over year to $976.7 million, reflecting the impact of orders slowdown caused by the pandemic. Ciena had one 10%-plus customer in the quarter, which represented 12% of revenues. The top line surpassed the consensus estimate of $972 million.
Region-wise, revenues in the Americas were $713.3 million, up 8.7% year over year. Revenues in Europe, the Middle East and Africa were $162.5 million, down from $169.5 million in the year-ago quarter. Asia-Pacific revenues totaled $100.9 million, down 25.1% year over year.
Segment Results
Total revenues in the Networking Platforms increased 0.8% year over year to $802.3 million. Platform Software and Services revenues were $46.4 million compared with $37.3 million in the prior-year quarter. Blue Planet Automation Software and Services revenues increased from $10.5 million to $11.3 million. Total revenues in Global Services were $116.7 million, flat year over year.
Other Details
The adjusted gross margin was 48.2% compared with 44.7% in the year-ago quarter. Adjusted operating expenses were $251.2 million, down from $273.2 million. Operating income improved to $188 million from $125.3 million. Adjusted operating income increased to $219.3 million from $156 million. The adjusted operating margin came in at 22.4% compared with 16.2% in the prior-year quarter. Adjusted EBITDA was $241.1 million, up from $178 million in the year-ago quarter.
Cash Flow & Liquidity
In the first nine months of fiscal 2020, Ciena generated $306.4 million of net cash from operating activities compared with $173.1 million in the prior-year period. As of Aug 1, the company had $1,093.7 million in cash and equivalents with $677.9 million of net long-term debt.
Zacks Rank & Stocks to Consider
Ciena carries a Zacks Rank #3 (Hold), at present.
Some better-ranked stocks in the broader industry are Turtle Beach Corporation (HEAR - Free Report) , Vocera Communications, Inc. and Acacia Communications, Inc. , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Turtle Beach has a trailing four-quarter earnings surprise of 41%, on average.
Vocera has a trailing four-quarter earnings surprise of 70%, on average. The company’s earnings beat the Zacks Consensus Estimate in three of the last four quarters.
Acacia has a trailing four-quarter earnings surprise of 17%, on average. The company’s earnings topped the consensus estimate in three of the last four quarters.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>