Ciena Corp (CIEN)

[chmcnfunds]

Ciena (CIEN) Posts Surprise 1Q Profit As Revenue Grows, Margins Jump

(By Balachander)

Ciena Corp. (NASDAQ: CIEN : 14.94, 0.02) posted an unexpected quarterly profit as the provider of networking services benefited from revenue growth and jump in margins.

On a non-GAAP basis, net income was $12.3 million or 12 cents a share for the first quarter, compared with a loss of $16.5 million or 17 cents a share in the year-ago quarter. Wall Street analysts, on average, expected CIEN to lose 14 cents a share.

On a GAAP basis, loss per share narrowed to 47 cents from 49 cents, while net loss remained at $47 million.

Revenue rose 9 percent to $453 million, versus consensus estimate of a growth of 7.80 percent. Sequentially, top-line witnessed a 2.7 percent drop.

Hanover, Maryland-based Ciena makes fiber-optic switches and sells optical transport systems for metro and enterprise wide-area networks, as well as broadband access products that help delivering Internet protocol (IP) services, such as VoIP, IP video, and DSL.

Ciena, which competes with Cisco Systems Inc. (NASDAQ: CSCO : 21.68, 0.48), Alcatel-Lucent (NYSE: ALU : 1.43, -0.02) and Ericsson serves customers in telecommunications, cable companies, and government entities.

Segment wise, revenue from the company's coverged packet-optical unit jumped 19 percent on a year-over-year basis. Packet Networking revenue more than doubled, while Optical Transport revenue dropped 46.5 percent.

Adjusted gross margin expanded to 44.6 percent from 41.9 percent in the prior year quarter. In the fourth quarter, adjusted gross margin was 42.7 percent. GAAP gross margin also improved to 43.2 percent from the year-ago period and sequentially.

Looking ahead for the second quarter, CIEN sees revenue between $465 and $495 million, while analysts estimate of $482 million. It expects adjusted gross margin in the range of low 40s.

The stock, which has been trading in the 52-week range of $11.44 to $18.39, closed at $14.94 on Wednesday.
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http://www.istockanalyst.com/finance/story/6333554/ciena-cien-posts-surprise-1q-profit-as-revenue-grows-margins-jump

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