Ciena Down But Investors Hold On For Growth
Ciena Corp.’s earnings beat estimates but shares tanked when it said revenue in the current quarter is likely to be adversely affected due to several variables.
Ciena, a provider of fiber optic network equipment for carriers, said revenue might be lower because the timing of potential orders is uncertain and concessions made to AT&T in their recent order.
The stock was down 8.43% in midday trading. That’s some reversal from June 6 when the stock had soared 18% after second-quarter profit topped expectations.
Ciena expects revenue from multiple projects but there might be short term pressure on margins, CFO James Moylan said. Investors on Stocktwits were bullish, saying the risks were nothing new.
The company forecast revenue of $570 million to $610 million for the current quarter, missing analysts’ estimates of $629 million.
But it scored a beat with profit of $16.2 million in the third quarter, or 15 cents per share, compared with a loss of $1.2 million or 1 cent per share a year earlier. Analysts had projected 28 cents.
Still, some investors think holding on to the stock is worthwhile long term because of the company’s growth record to date. Demand for optical gear is high, and Ciena has international projects which will contribute to revenue growth.
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