Ciena Trips Over the Bottom Line

By Chris Lange Published Dec 11, 8:45AM EST

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Ciena Corp. (NYSE: CIEN) reported its fiscal fourth-quarter results Thursday before the market open as -$0.08 in earnings per share and $591 million in revenue. That was against Thomson Reuters consensus estimates of $0.13 in earnings per share and $589.44 million in revenue. In the fourth quarter of the previous year, Ciena posted $0.16 in earnings per share and $583.38 million in revenue.

The company described its outlook for the first quarter as revenue in the range of $540 million to $570 million, gross margin near 40% and operating expense of roughly $210 million. The consensus estimates for the first quarter are $0.12 in earnings per share and $566.58 million in revenue.

A few main points from the earnings report:

Non-U.S. customers contributed 47.8% of total revenue.
One 10%-plus customer represented a total of 12.2% of revenue.
Cash and investments totaled $777.0 million.
Inventories totaled $254.7 million.

Gary B. Smith, president and CEO of Ciena, said:

We delivered strong revenue growth and improved profitability in fiscal 2014 as we benefited from a more diversified customer base and the strong alignment of our solutions with the increasing on-demand needs of our customers. As we continue to expand Ciena’s role and reach, we are well positioned to drive continued growth and increased profitability in 2015.

Zacks had reiterated a Neutral rating for Ciena with a price target of $17 on December 5.

Shares of Ciena closed Wednesday down 3.5% at $16.96. Following the release of the earnings report, the initial response in the premarket was negative and shares were down another 3% at $16.41.

The consensus analyst price target is $24.50, and the 52-week trading range is $13.77 to $27.16. Ciena has a market cap of almost $2 billion.

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About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.