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Ciena (CIEN) Q1 Earnings Top Estimates, Revenues Decline Y/Y
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Ciena Corporation (CIEN - Free Report) reported first-quarter fiscal 2024 (ended Jan 27) results, wherein its adjusted earnings per share (EPS) of 66 cents beat the Zacks Consensus Estimate of 47 cents. Earnings improved 3.1% year over year.
Quarterly total revenues were down 1.8% year over year to $1,037.7 million. The downtick was driven by the macroeconomic concerns that are causing lower-than-expected order volumes from service providers in several overseas geographies. However, the top line surpassed the Zacks Consensus Estimate by 1.9%.
Non-telco customer revenues increased 54% year over year in the reported quarter. Two customers represented 10%-plus of revenues, representing 26.5% of the top line in the fiscal first quarter.
Ciena Corporation Price, Consensus and EPS Surprise
For fiscal 2024, management anticipates revenues in the range of $4 billion-$4.3 billion compared with fiscal 2023 revenues of $4.38 billion. The company had previously projected revenue growth between 1% and 4%.
The adjusted gross margin is envisioned in the mid-40% range. Adjusted operating expenses are suggested to be $340-$345 million per quarter.
Key component shortages, extended lead times, large orders placed in response to market demands, and customer inventory builds of networking equipment are all likely to hurt the company.
Following weak outlook, shares of CIEN plunged 14.7% on Mar 7 and closed trading at $52.84. In the past year, shares have gained 6.4% of their value compared with sub-industry’s growth of 24.4%.
Image Source: Zacks Investment Research
Segment Results
Total revenues in Networking Platforms (77.8% of total revenues) decreased 5.6% year over year to $807.2 million. We expected the metric to be $829 million.
Platform Software and Services’ revenues (8.6%) totaled $89.7 million, up 22.7% from the prior year. We projected the metric to be $68.3 million.
Blue Planet Automation Software and Services’ revenues (1.4%) decreased 9.1% to $14 million. We suggested the metric to be $13.6 million.
Total revenues in Global Services (12.2%) were $126.8 million, up 12.6% year over year. Our estimate for segmental revenues was $96.6 million.
Region-wise, revenues in the Americas were $718.2 million, down 6.1% year over year. Europe, the Middle East and Africa generated $207.4 million revenues, up 35.7% from the prior-year levels. Revenues in the Asia Pacific totaled $112.1 million, down 19.1% from the year-earlier figure.
Other Details
Non-GAAP adjusted gross margin was 45.7% compared with 43.7% a year ago. Adjusted operating expenses were $336.8 million, up 2.3% from the prior-year levels.
Non-GAAP adjusted operating margin was 13.2% compared with 12.6% in the year-earlier quarter. Non-GAAP adjusted EBITDA increased 3.2% year over year to $160 million.
Cash Flow & Liquidity
For the quarter that ended on Jan 27, 2024, Ciena’s net cash generated from operating activities was $266 million. In the prior year, it used net cash from operating activities of $266 million.
As of Jan 27, the company had $1.48 billion in cash and investments and $1,543.1 million of net long-term debt.
In the reported quarter, CIEN repurchased about 0.7 million shares worth $32 million.
Guidance
For the second quarter of fiscal 2024, management expects revenues in the range of $850 million-$930 million. The adjusted gross margin is estimated in the low-40% range. Adjusted operating expenses are projected to be in the range of $340-$345 million.
CIEN plans to repurchase shares worth $250 million in fiscal 2024.
The Zacks Consensus Estimate for Synopsys’ 2024 EPS has improved 1.1% in the past 60 days to $13.56. SNPS’ long-term earnings growth rate is 17.5%.
Synopsys’ earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 4.1%. Shares of SNPS have risen 56.1% in the past year.
The Zacks Consensus Estimate for Woodward’s fiscal 2024 EPS has inched up 5.7% in the past 60 days to $5.27. WWD’s long-term earnings growth rate is 15.5%.
Woodward’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 27.2%. Shares of WWD have risen 50.5% in the past year.
The Zacks Consensus Estimate for Watts Water Technologies’ fiscal 2024 EPS has improved 2.5% in the past 60 days to $8.54. WTS’ long-term earnings growth rate is 7.8%.
WTS’ earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 13.5%. Shares of WTS have risen 16.5% in the past year.
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Ciena (CIEN) Q1 Earnings Top Estimates, Revenues Decline Y/Y
Ciena Corporation (CIEN - Free Report) reported first-quarter fiscal 2024 (ended Jan 27) results, wherein its adjusted earnings per share (EPS) of 66 cents beat the Zacks Consensus Estimate of 47 cents. Earnings improved 3.1% year over year.
Quarterly total revenues were down 1.8% year over year to $1,037.7 million. The downtick was driven by the macroeconomic concerns that are causing lower-than-expected order volumes from service providers in several overseas geographies. However, the top line surpassed the Zacks Consensus Estimate by 1.9%.
Non-telco customer revenues increased 54% year over year in the reported quarter. Two customers represented 10%-plus of revenues, representing 26.5% of the top line in the fiscal first quarter.
Ciena Corporation Price, Consensus and EPS Surprise
Ciena Corporation price-consensus-eps-surprise-chart | Ciena Corporation Quote
For fiscal 2024, management anticipates revenues in the range of $4 billion-$4.3 billion compared with fiscal 2023 revenues of $4.38 billion. The company had previously projected revenue growth between 1% and 4%.
The adjusted gross margin is envisioned in the mid-40% range. Adjusted operating expenses are suggested to be $340-$345 million per quarter.
Key component shortages, extended lead times, large orders placed in response to market demands, and customer inventory builds of networking equipment are all likely to hurt the company.
Following weak outlook, shares of CIEN plunged 14.7% on Mar 7 and closed trading at $52.84. In the past year, shares have gained 6.4% of their value compared with sub-industry’s growth of 24.4%.
Image Source: Zacks Investment Research
Segment Results
Total revenues in Networking Platforms (77.8% of total revenues) decreased 5.6% year over year to $807.2 million. We expected the metric to be $829 million.
Platform Software and Services’ revenues (8.6%) totaled $89.7 million, up 22.7% from the prior year. We projected the metric to be $68.3 million.
Blue Planet Automation Software and Services’ revenues (1.4%) decreased 9.1% to $14 million. We suggested the metric to be $13.6 million.
Total revenues in Global Services (12.2%) were $126.8 million, up 12.6% year over year. Our estimate for segmental revenues was $96.6 million.
Region-wise, revenues in the Americas were $718.2 million, down 6.1% year over year. Europe, the Middle East and Africa generated $207.4 million revenues, up 35.7% from the prior-year levels. Revenues in the Asia Pacific totaled $112.1 million, down 19.1% from the year-earlier figure.
Other Details
Non-GAAP adjusted gross margin was 45.7% compared with 43.7% a year ago. Adjusted operating expenses were $336.8 million, up 2.3% from the prior-year levels.
Non-GAAP adjusted operating margin was 13.2% compared with 12.6% in the year-earlier quarter. Non-GAAP adjusted EBITDA increased 3.2% year over year to $160 million.
Cash Flow & Liquidity
For the quarter that ended on Jan 27, 2024, Ciena’s net cash generated from operating activities was $266 million. In the prior year, it used net cash from operating activities of $266 million.
As of Jan 27, the company had $1.48 billion in cash and investments and $1,543.1 million of net long-term debt.
In the reported quarter, CIEN repurchased about 0.7 million shares worth $32 million.
Guidance
For the second quarter of fiscal 2024, management expects revenues in the range of $850 million-$930 million. The adjusted gross margin is estimated in the low-40% range. Adjusted operating expenses are projected to be in the range of $340-$345 million.
CIEN plans to repurchase shares worth $250 million in fiscal 2024.
Zacks Rank and Stocks to Consider
At present, Ciena carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader technology space are Synopsys (SNPS - Free Report) , Woodward (WWD - Free Report) and Watts Water Technologies (WTS - Free Report) . Synopsys sports a Zacks Rank #1 (Strong Buy), while Watts Water Technologies and Woodward carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Synopsys’ 2024 EPS has improved 1.1% in the past 60 days to $13.56. SNPS’ long-term earnings growth rate is 17.5%.
Synopsys’ earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 4.1%. Shares of SNPS have risen 56.1% in the past year.
The Zacks Consensus Estimate for Woodward’s fiscal 2024 EPS has inched up 5.7% in the past 60 days to $5.27. WWD’s long-term earnings growth rate is 15.5%.
Woodward’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 27.2%. Shares of WWD have risen 50.5% in the past year.
The Zacks Consensus Estimate for Watts Water Technologies’ fiscal 2024 EPS has improved 2.5% in the past 60 days to $8.54. WTS’ long-term earnings growth rate is 7.8%.
WTS’ earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 13.5%. Shares of WTS have risen 16.5% in the past year.