Ciena Earnings Preview

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Ciena (NAS: CIEN) beat estimates by $0.29 last quarter and investors are hoping it can beat them again. The company will unveil its latest earnings on Thursday. Ciena is a provider of communications networking equipment, software, and services that support the transport, switching, aggregation, and management of voice, video, and data traffic.

What analysts say:

  • Buy, sell, or hold?: Analysts are bullish on this stock with 12 analysts rating it as a buy and only one rating it as a sell. Analysts like Ciena better than competitor Tellabs overall. Analysts still rate the stock a moderate buy, but they are a bit more wary about it compared to three months ago.
  • Revenue forecasts: On average, analysts predict $450.3 million in revenue this quarter. That would represent a rise of 7.8% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is a loss of $0.05 per share. Estimates range from a loss of $0.13 to a profit of $0.02.

What our community says:
CAPS All-Stars are solidly backing the stock with 80.9% awarding it an outperform rating. The community at large agrees with the All-Stars with 85.9% giving it a rating of outperform. Fools have embraced Ciena and haven't been shy with their opinions lately, logging 192 posts in the past 30 days. Ciena's bearish CAPS rating of two out of five stars falls short of the Fool community sentiment.

Management:
The company raised its gross margin by 5.5 percentage points in the last quarter. Revenue rose 11.7% while cost of sales rose 1.9% to $250.4 million from a year earlier.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter

Q3

Q2

Q1

Q4

Gross Margin

42.5%

39.7%

38.9%

40.3%

Operating Margin

(4.0%)

(13.3%)

(17.1%)

(19.4%)

Net Margin

(7.2%)

(15.0%)

(18.2%)

(19.2%)

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Earnings estimates provided by Zacks

At the time this article was published

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