Ciena posts stable Q3, but market unsatisfied

Rob Powell/Telecom Ramblings
05 Sep 2014
00:00

Ciena hit its numbers easily enough yesterday, but the market doesn’t seem to like its guidance for the fiscal Q4. They’ve had a series of strong reports, I suppose it was inevitable that the bar would be raised too high. Here is a quick summary in some context:

$ in millions

FQ3/13

FQ4/13

FQ1/14

FQ2/14

FQ3/14

FQ4/14
(guidance)

-Converged Packet-Optical

302.0

350.9

333.4

356.8

382.0

-Packet Networking

61.6

61.2

51.7

66.5

69.5

-Optical Transport

66.2

52.6

40.1

29.6

31.0

-Software and Services

108.6

118.7

108.5

107.1

121.1

Revenue

538.4

583.4

533.7

560.0

603.6

570-610

Adj. OPEX

190.4

210.5

199.8

206.3

206.3

~210

Adj. GM%

43.6%

40.8

43.4%

41.3%

44.3%

high 30%s to low 40%s

Adj. EPS

0.23

0.16

0.13

0.17

0.32

Revenues of $603.6 million were within the guided range and a touch higher than analyst estimates, while adjusted earnings per share of $0.32 were a few pennies above projections as well.

But the street was looking for a big fiscal Q4 with revenues in the $629 million range, a number Ciena’s guidance of $570-610 million fell rather short of.

According to the PR, fiscal Q4 will be “impacted by several significant variables that contribute to a broader range of potential outcomes for both revenue and gross margin than typically expected.” That’s not very specific so I suppose we’ll have to wait for the call to get a bit more color.

This article was authored by Rob Powell and was originally posted on Telecomramblings.com

Rob Powell is founder & editor of Telecom Ramblings, which was set up in 2008. The website is dedicated to discussing trends and developments in the telecom industry.

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