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Why Is Ciena (CIEN) Up 5.5% Since Last Earnings Report?
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A month has gone by since the last earnings report for Ciena (CIEN - Free Report) . Shares have added about 5.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Ciena due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Ciena Q1 Earnings & Revenues Top Estimates
Ciena Corporation reported first-quarter fiscal 2023 (ended Jan 28) results, with adjusted earnings of 64 cents per share beating the Zacks Consensus Estimate of 36 cents. Earnings improved 36.2% year over year.
Quarterly total revenues were up 25% year over year to $1,056.5 million owing to improvement in supply-chain issues and strong demand. The top line surpassed the Zacks Consensus Estimate by 10.1%.
Non-telco customers contributed nearly 40% to revenues in the reported quarter. Two customers represented a total of 25.7% of revenues in the fiscal first quarter.
Segment Results
Total revenues in Networking Platforms (81% of total revenues) increased 36.5% year over year to $855.1 million.
Platform Software and Services’ revenues (6.9% of total revenues) totaled $73.4 million, up 0.7% from the prior-year quarter’s levels.
Blue Planet Automation Software and Services’ revenues (1.4% of total revenues) declined 27% to $15.4 million. Total revenues in Global Services (10.7% of total revenues) were $112.6 million, down 9% year over year.
Region-wise, revenues in the Americas were $765.1 million, up 28.6% year over year. Revenues in Europe, the Middle East and Africa were $152.8 million, up 1.3% from the prior-year quarter’s levels. Revenues in the Asia Pacific totaled $138.6 million, up 40.7% from the prior-year quarter figure.
Other Details
Non-GAAP adjusted gross margin was 43.7% compared with 46.2% in the year-ago quarter. Adjusted operating expenses were $329.3 million, up 13.6% from the prior-year quarter’s levels.
Non-GAAP adjusted operating margin came in at 12.6% compared with 11.8% in the prior-year quarter. Non-GAAP adjusted EBITDA increased 25.4% year over year to $155.1 million.
Cash Flow & Liquidity
For the quarter ended Jan 28, Ciena’s net cash used in operating activities was $265.6 million compared with $54.4 million in the prior-year quarter.
As of Jan 28, the company had $1.2 billion in cash and investments and $1,547.5 million of net long-term debt.
Guidance
For the second quarter of fiscal 2023, the company expects revenues in the range of $1,035-$1,115 million. The adjusted gross margin is estimated to be low 40%. Adjusted operating expenses are estimated to be $335 million.
For fiscal 2023, the company expects revenue growth in the range of 20-22%, up from the earlier guided range of 16-18%. Adjusted gross margin is estimated to be between 42% and 44%. Adjusted operating expenses are estimated to be $330 million per quarter in the remaining quarters.
The outlook is driven by a strong demand and signs of supply-chain improvement.
The company plans to repurchase shares worth $250 million in fiscal 2023. Ciena repurchased $500 million worth of shares in fiscal 2022.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
The consensus estimate has shifted 11.79% due to these changes.
VGM Scores
At this time, Ciena has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Ciena has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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Why Is Ciena (CIEN) Up 5.5% Since Last Earnings Report?
A month has gone by since the last earnings report for Ciena (CIEN - Free Report) . Shares have added about 5.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Ciena due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Ciena Q1 Earnings & Revenues Top Estimates
Ciena Corporation reported first-quarter fiscal 2023 (ended Jan 28) results, with adjusted earnings of 64 cents per share beating the Zacks Consensus Estimate of 36 cents. Earnings improved 36.2% year over year.
Quarterly total revenues were up 25% year over year to $1,056.5 million owing to improvement in supply-chain issues and strong demand. The top line surpassed the Zacks Consensus Estimate by 10.1%.
Non-telco customers contributed nearly 40% to revenues in the reported quarter. Two customers represented a total of 25.7% of revenues in the fiscal first quarter.
Segment Results
Total revenues in Networking Platforms (81% of total revenues) increased 36.5% year over year to $855.1 million.
Platform Software and Services’ revenues (6.9% of total revenues) totaled $73.4 million, up 0.7% from the prior-year quarter’s levels.
Blue Planet Automation Software and Services’ revenues (1.4% of total revenues) declined 27% to $15.4 million.
Total revenues in Global Services (10.7% of total revenues) were $112.6 million, down 9% year over year.
Region-wise, revenues in the Americas were $765.1 million, up 28.6% year over year. Revenues in Europe, the Middle East and Africa were $152.8 million, up 1.3% from the prior-year quarter’s levels. Revenues in the Asia Pacific totaled $138.6 million, up 40.7% from the prior-year quarter figure.
Other Details
Non-GAAP adjusted gross margin was 43.7% compared with 46.2% in the year-ago quarter. Adjusted operating expenses were $329.3 million, up 13.6% from the prior-year quarter’s levels.
Non-GAAP adjusted operating margin came in at 12.6% compared with 11.8% in the prior-year quarter. Non-GAAP adjusted EBITDA increased 25.4% year over year to $155.1 million.
Cash Flow & Liquidity
For the quarter ended Jan 28, Ciena’s net cash used in operating activities was $265.6 million compared with $54.4 million in the prior-year quarter.
As of Jan 28, the company had $1.2 billion in cash and investments and $1,547.5 million of net long-term debt.
Guidance
For the second quarter of fiscal 2023, the company expects revenues in the range of $1,035-$1,115 million. The adjusted gross margin is estimated to be low 40%. Adjusted operating expenses are estimated to be $335 million.
For fiscal 2023, the company expects revenue growth in the range of 20-22%, up from the earlier guided range of 16-18%. Adjusted gross margin is estimated to be between 42% and 44%. Adjusted operating expenses are estimated to be $330 million per quarter in the remaining quarters.
The outlook is driven by a strong demand and signs of supply-chain improvement.
The company plans to repurchase shares worth $250 million in fiscal 2023. Ciena repurchased $500 million worth of shares in fiscal 2022.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
The consensus estimate has shifted 11.79% due to these changes.
VGM Scores
At this time, Ciena has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Ciena has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.