{"id":55546,"date":"2023-09-01T01:24:13","date_gmt":"2023-09-01T05:24:13","guid":{"rendered":"https:\/\/ifintechworld.com\/investing\/ciena-stock-rallies-after-earnings-ceo-says-demand-is-solid\/"},"modified":"2023-09-01T01:24:16","modified_gmt":"2023-09-01T05:24:16","slug":"ciena-stock-rallies-after-earnings-ceo-says-demand-is-solid","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=55546","title":{"rendered":"Ciena Stock Rallies After Earnings. CEO Says “Demand Is Solid.”"},"content":{"rendered":"
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Ciena shares were surging after the optical networking firm posted better-than-expected financial results, driven by growing demand for the company\u2019s hardware from cloud computing providers.<\/p>\n

For its fiscal third quarter ended July 29,
\n Ciena
\n (ticker: CIEN) reported revenue of $1.07 billion, up 23% from the year-ago quarter, toward the top of the company\u2019s guidance range of $1 billion to $1.08 billion and above consensus at $1.04 billion.\u00a0<\/p>\n

\n

Adjusted profit was 59 cents a share, ahead of the consensus forecast at 51 cents. Under generally accepted accounting principles, or GAAP, the company earned 20 cents a share. Adjusted gross margin was 42.7%, up from 40% in the year earlier period.<\/p>\n

CEO Gary Smith said in an interview with Barron\u2019s <\/em>that \u201cdemand is solid and durable\u201d from both carriers and cloud giants. In recent quarters, the business had been disrupted by \u201cdiscontinuities between supply and demand\u201d tied to the pandemic and supply chain shortages, Smith said, adding the situation is \u201cnow coming into alignment.\u201d<\/p>\n

In Thursday trading, Ciena shares were 14% higher to $49.33.<\/p>\n

For the fiscal fourth quarter, Ciena sees revenue of $1.06 billion to $1.14 billion, about in-line with estimates, with adjusted grow margin in the low- to mid-40s on a percentage basis. The company also repurchased $61.2 million of common stock in the quarter.<\/p>\n

Ciena, which historically has been primarily a provider to telecommunications companies, has been growing its business with cloud providers. Non-telco customers were a record high 46% of revenue in the quarter, the company said in a presentation to investors.<\/p>\n

\u201cWe delivered excellent results for the fiscal third quarter with strength across all regions,\u201d Smith added in a statement. \u201cWe are encouraged by increased customer activity that, when combined with our elevated backlog, market leadership and expanding addressable market, we believe will drive growth and market share gains going forward.\u201d<\/p>\n

Some telecom suppliers, such as
\n Ericsson
\n (ERIC) and
\n Nokia
\n (NOK), have recently posted disappointing results, citing softer demand from North American telcos. But Smith said the issue is not a lack of demand, but instead the need to absorb hardware acquired. \u201cIt\u2019s not a demand issue,\u201d he told Barron\u2019s<\/em>. \u201cThey need the stuff.\u201d <\/p>\n

Smith noted that Ciena\u2019s backlog remains at unusually high levels. He expects Ciena to end the year with $2.7 billion in backlog, \u201cmore than double normal.\u201d Bleeding off that backlog has provided fuel for the recent strong growth. He said the company\u2019s long-term growth rate will be in the 6% to 7% range, about where it was before the pandemic.<\/p>\n

As for cloud customers, Smith noted that revenue from that segment was up almost 40% in the latest quarter. He said cloud customers have largely absorbed what were high inventories of hardware and have begun to \u201ccome back on orders.\u201d He said the cloud players are building out capacity in anticipation of artificial intelligence and machine learning.<\/p>\n

Write to Eric J. Savitz at eric.savitz@barrons.com<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Ciena shares were surging after the optical networking firm posted better-than-expected financial results, driven by growing demand for the company\u2019s hardware from cloud computing providers. For its fiscal third quarter ended July 29, Ciena (ticker: CIEN) reported revenue of $1.07 billion, up 23% from the year-ago quarter, toward the top of the company\u2019s guidance range […]<\/p>\n","protected":false},"author":1,"featured_media":55547,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"video","meta":{"footnotes":""},"categories":[239],"tags":[83],"class_list":["post-55546","post","type-post","status-publish","format-video","has-post-thumbnail","hentry","category-investing","tag-featured","post_format-post-format-video"],"yoast_head":"\nCiena Stock Rallies After Earnings. 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