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  1. Home
  2. / Investing
  3. / Technology

Ciena Results Aren't Inspiring, but Shares Climb Anyway

Its fourth-quarter numbers were shy of expectations and its guidance for the current quarter was tightened.
By JAY SOMANEY Dec 08, 2016 | 10:00 AM EST
Stocks quotes in this article: CIEN

Ciena (CIEN) this morning reported numbers for the quarter ended Oct. 31 that came in a bit below expectations on the earnings front and also tightened/slightly lowered guidance for the current quarter (the fiscal first quarter ending January 2017), as I anticipated in my preview from yesterday. 

The provider of communications network equipment and services reported earnings for the October quarter of $0.44 per share on revenues of $716.2 million. The Street was expecting earnings of $0.46 per share on revenues of $716.9 million.

For the current quarter ending in January, Ciena is guiding revenues to a range of $615 million to $645 million, or $630 million at the midpoint, versus the current Street consensus of $635 million in revenues. The company also is guiding gross margins in the mid-40s range (in line with estimates) and operating expense in the range of $220 million to $225 million for the current quarter.

The company finished the October quarter with $1.1 billion in cash and investments and generated $137 million in operational cash flow in the quarter.

Currently valued at around 13x estimated earnings of $1.71 per share for the year ending January 2018, Ciena shares are cheap if compared on a market multiple to earnings basis.

However, there is nothing in the results to get me too excited or too despondent.

Though the shares initially were down in pre-market trading, they rose and opened the day up about 12%.

Going into the earnings this morning, shares were priced for a move of $1.90 per share in either direction.

What the sell-siders say this morning will be interesting to read given the fact that there were 15 buy ratings on the company going into the earnings report.

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At the time of publication, Somaney had no positions in the stock mentioned.

TAGS: Investing | U.S. Equity | Technology | Telecom Services | Earnings | Stocks

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