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Ciena (CIEN) to Report Q2 Earnings: What's in the Cards?

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Ciena Corporation (CIEN - Free Report) is scheduled to report second-quarter fiscal 2020 results (ended Apr 30, 2020) on Jun 4, before the opening bell. In the last reported quarter, the company delivered a positive earnings surprise of 36.8%, beating the Zacks Consensus Estimate by 14 cents.

Despite uncertainties related to the COVID-19 pandemic, this Hanover, MD-based networking systems, services and software company is expected to have recorded higher aggregate revenues on a year-over-year basis. The performance is likely to have been supported by Ciena’s diversification across customer segments and regions combined with its technology leadership, including the 5th-generation 800-gig WaveLogic modem technology.

Let’s discuss the factors that are likely to get reflected in the upcoming quarterly announcement.

Factors at Play

During the quarter under review, Ciena added several new products and capabilities to its 5G Network Solutions aimed at reducing network complexity and fueling operators’ migration from 4G to 5G. The Europe India Gateway submarine cable system was upgraded to accelerate connectivity between businesses in Europe, the Middle East and India, using Ciena’s submarine network solution. The cable was modernized with Ciena’s GeoMesh solution, powered by WaveLogic Ai coherent optics.

Using Ciena’s WaveLogic 5 Extreme and flexible grid technology, Comcast conducted the world’s first long-distance 600Gbps single wavelength pilot deployment. Ciena and Arista completed an interoperability test of the industry’s most dense and spectrally-efficient 400GbE transport solution with the highest density native 400GbE router. Ciena’s performance is likely to have benefited from these developments in the to-be-reported quarter.

Eletronet, one of the largest IP transit providers in Brazil, deployed intelligent automation software from Blue Planet to help manage its Internet Protocol network more efficiently. Blue Planet, a division of Ciena, provides market-leading intelligent automation software and specialized professional services to help clients modernize their IT and network operations. Tasmanian Networks Pty Limited (TasNetworks), an electricity transmission and distribution network provider, selected Ciena’s coherent optical solutions to address rising bandwidth requirements driven by IoT, 5G and data center services.

For the fiscal second quarter, the Zacks Consensus Estimate for total revenues is pegged at $888 million that indicates a rise of 2.7% from the year-ago quarter’s reported figure. Adjusted earnings per share are pegged at 50 cents, which calls for a growth of 4.2% 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 -2.88% as the former is pegged at 49 cents and the latter at 50 cents.

Ciena Corporation Price and EPS Surprise



Zacks Rank: Ciena currently carries a Zacks Rank #2.

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.

The J. M. Smucker Company (SJM - Free Report) is slated to release fourth-quarter fiscal 2020 results on Jun 4. It has an Earnings ESP of +4.33% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Navistar International Corporation (NAV - Free Report) is scheduled to release second-quarter fiscal 2020 results on Jun 4. The company has an Earnings ESP of +10.70% and a Zacks Rank #3.

Chewy, Inc. (CHWY - Free Report) has an Earnings ESP of +100.00% and a Zacks Rank of 2. The company is set to report first-quarter fiscal 2020 results on Jun 9.

5 Stocks to Soar Past the Pandemic: In addition to the companies you learned about above, we invite you to learn about 5 cutting-edge stocks that could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of the decade.

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