We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Ciena's (CIEN) Q4 Earnings Miss Estimates, Revenues Beat
Read MoreHide Full Article
Ciena Corporation (CIEN - Free Report) reported fiscal fourth-quarter 2017 non-GAAP earnings of 46 cents, which increased 4.6% on a year-over-year basis but missed the Zacks Consensus Estimate of 50 cents.
Revenues of $744.4 million increased 3.95% year over year and beat the consensus mark of $738.1 million.
Although shares of Ciena have lost 15% of its value year to date, it fared better than the industry to which it belongs. The industry has declined 26.7% in the same time frame.
Segmental Details
Product revenues (82.8% of revenues) were up 5.8% year over year to $616.2 million. Services revenues (17.2% of revenues) declined 4.1% year over year to $128.2 million.
Segment-wise, networking platforms (80.5% of total revenue) grew 5.8% year over year to $598.9 million. The company’s stackable data center interconnect platform, WaveServer is trending well and it is expected to be a key growth driver going ahead.
The company believes that its newly launched 400 gig per wavelength chip, Wavelogic AI, which had a small contribution in the fourth quarter, will have a significant impact on its global sales going forward.
Fiber Deep technology represents a big opportunity for the company going forward driven by the strong adoption of its products among all major cable operators in the global market.
Revenues from Software and software-related services (5.6% of total revenue) rose 11.2% year over year to $41.8 million. The company's focus on migrating customers to Blue Planet network domain controller platform and increasing adoption of the Blue Planet analytics and orchestration platforms is a positive.
Global services revenues (13.9% of total revenue) declined 7.7% from the year-ago quarter to $103.7 million. The decline in deployment services in Caribbean and Latin America (CALA) and Brazil where the company had very large deployments in the last few years led to the year-over-year decline. However, on a sequential basis, it fared better.
Region-wise, Ciena’s revenues declined 4.9% in North America, 7.1% in CALA and 1.6% in Europe, the Middle East and Africa (EMEA), but soared 59.6% in Asia Pacific (APAC). Growth in APAC was fueled by India, which doubled sequentially. The company is very optimistic about the future prospects in the country.
U.S. customers accounted for 59.2% of its revenues, of which 27.6% was contributed by two major customers namely AT&T and Verizon.
However, the growth of these two major Tier 1 companies taken together is expected to remain flat or slightly down in the next year, which is a big concern.
Ciena Corporation Price, Consensus and EPS Surprise
The company’s non-GAAP gross margin contracted 100 basis points (bps) year over year to 44.2%.
Ciena incurred non-GAAP operating expenses of $240.9 million, up 3.7% from the year-ago quarter. However, as a percentage of revenues, it decreased 10 bps from the year-ago quarter to 32.4%.
Non-GAAP operating margin declined 90 bps to 11.9%.
Balance Sheet
The company ended the quarter with cash and investments of $919.6 million, compared with $854.2 million at the end of the previous quarter.
Ciena generated operating cash flow of $138.5 million in the quarter compared with approximately $136.7 million in the year-ago quarter.
Ciena announced its plan to repurchase up to $300 million of the company’s common stock through the end of fiscal 2020.
Guidance
Ciena also provided guidance for first-quarter fiscal 2018. Revenues for the current quarter are forecast in the range of $625–$655 million. Non-GAAP gross margin is anticipated to be approximately in the low to mid-40% range. Non-GAAP operating expenses are projected to be around $238 million.
The company expects overall annual revenue to grow in the range of 5-7% on an average over the next three years. Non-GAAP earnings are anticipated to grow in the range of 14-16% over the same time period.
Long-term earnings growth rate for Intel, Lam Research and NVIDIA is projected to be 8.4%, 14.9% and 10.3%, respectively.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Image: Bigstock
Ciena's (CIEN) Q4 Earnings Miss Estimates, Revenues Beat
Ciena Corporation (CIEN - Free Report) reported fiscal fourth-quarter 2017 non-GAAP earnings of 46 cents, which increased 4.6% on a year-over-year basis but missed the Zacks Consensus Estimate of 50 cents.
Revenues of $744.4 million increased 3.95% year over year and beat the consensus mark of $738.1 million.
Although shares of Ciena have lost 15% of its value year to date, it fared better than the industry to which it belongs. The industry has declined 26.7% in the same time frame.
Segmental Details
Product revenues (82.8% of revenues) were up 5.8% year over year to $616.2 million. Services revenues (17.2% of revenues) declined 4.1% year over year to $128.2 million.
Segment-wise, networking platforms (80.5% of total revenue) grew 5.8% year over year to $598.9 million. The company’s stackable data center interconnect platform, WaveServer is trending well and it is expected to be a key growth driver going ahead.
The company believes that its newly launched 400 gig per wavelength chip, Wavelogic AI, which had a small contribution in the fourth quarter, will have a significant impact on its global sales going forward.
Fiber Deep technology represents a big opportunity for the company going forward driven by the strong adoption of its products among all major cable operators in the global market.
Revenues from Software and software-related services (5.6% of total revenue) rose 11.2% year over year to $41.8 million. The company's focus on migrating customers to Blue Planet network domain controller platform and increasing adoption of the Blue Planet analytics and orchestration platforms is a positive.
Global services revenues (13.9% of total revenue) declined 7.7% from the year-ago quarter to $103.7 million. The decline in deployment services in Caribbean and Latin America (CALA) and Brazil where the company had very large deployments in the last few years led to the year-over-year decline. However, on a sequential basis, it fared better.
Region-wise, Ciena’s revenues declined 4.9% in North America, 7.1% in CALA and 1.6% in Europe, the Middle East and Africa (EMEA), but soared 59.6% in Asia Pacific (APAC). Growth in APAC was fueled by India, which doubled sequentially. The company is very optimistic about the future prospects in the country.
U.S. customers accounted for 59.2% of its revenues, of which 27.6% was contributed by two major customers namely AT&T and Verizon.
However, the growth of these two major Tier 1 companies taken together is expected to remain flat or slightly down in the next year, which is a big concern.
Ciena Corporation Price, Consensus and EPS Surprise
Ciena Corporation Price, Consensus and EPS Surprise | Ciena Corporation Quote
Margins
The company’s non-GAAP gross margin contracted 100 basis points (bps) year over year to 44.2%.
Ciena incurred non-GAAP operating expenses of $240.9 million, up 3.7% from the year-ago quarter. However, as a percentage of revenues, it decreased 10 bps from the year-ago quarter to 32.4%.
Non-GAAP operating margin declined 90 bps to 11.9%.
Balance Sheet
The company ended the quarter with cash and investments of $919.6 million, compared with $854.2 million at the end of the previous quarter.
Ciena generated operating cash flow of $138.5 million in the quarter compared with approximately $136.7 million in the year-ago quarter.
Ciena announced its plan to repurchase up to $300 million of the company’s common stock through the end of fiscal 2020.
Guidance
Ciena also provided guidance for first-quarter fiscal 2018. Revenues for the current quarter are forecast in the range of $625–$655 million. Non-GAAP gross margin is anticipated to be approximately in the low to mid-40% range. Non-GAAP operating expenses are projected to be around $238 million.
The company expects overall annual revenue to grow in the range of 5-7% on an average over the next three years. Non-GAAP earnings are anticipated to grow in the range of 14-16% over the same time period.
Zacks Rank and Stocks to Consider
Ciena carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the broader technology sector include Intel Corporation (INTC - Free Report) , Lam Research Corporation (LRCX - Free Report) and NVIDIA Corporation (NVDA - Free Report) , all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.
Long-term earnings growth rate for Intel, Lam Research and NVIDIA is projected to be 8.4%, 14.9% and 10.3%, respectively.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Click for details >>