CIENA Whiffs on Earnings

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CIENA (NAS: CIEN) reported earnings on Dec. 8. Here's what you need to know.

The 10-second takeaway
For the quarter ended Oct. 31 (Q4), CIENA beat slightly on revenues and whiffed on EPS. Margins expanded across the board.

Revenue
CIENA reported revenue of $455 million. The 19 analysts polled by S&P Capital IQ wanted to see revenue of $450 million.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.

EPS
Non-GAAP EPS came in at $0.03. The 18 earnings estimates compiled by S&P Capital IQ forecast $0.07 per share on the same basis. GAAP EPS were -$0.23 for Q4versus -$0.86 per share for the prior-year quarter.

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Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.

Margins
For the quarter, gross margin was 41.7%, 1,350 basis points better than the prior-year quarter. Operating margin was -2.9%, 2,650 basis points better than the prior-year quarter. Net margin was -4.9%, 1,430 basis points better than the prior-year quarter.

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Source: S&P Capital IQ. Quarterly periods.

Looking ahead
What does the future hold?

Next quarter's average estimate for revenue is $446 million. On the bottom line, the average EPS estimate is for $0.01. (There are 19 revenue estimates and 18 EPS estimates.)

For the full year ending 2012, the average estimate for revenue is $1.9 billion. The average EPS estimate is $0.53. (There are 19 revenue estimates and 20 EPS estimates.)

Investor sentiment
The stock has a two-star rating out of five at Motley Fool CAPS, with 474 members out of 549 rating the stock outperform and 76 members rating it underperform. Among 132 CAPS All-Star picks, 106 give CIENA a green thumbs-up, and 26 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on CIENA is outperform, with an average price target of $19.26.

At the time this article was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2011 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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