Ciena misses first quarter 2015 revenue target

Ciena Corp. (NYSE: CIEN) reported $529.2 million in revenue for its fiscal first quarter ended January 31, 2015. The number missed the bottom end of its guidance for the quarter by $10.8 million as well as Wall Street consensus estimates by nearly $30 million. However, the company exceeded profitability expectations and guided revenues up significantly for the second quarter.

Ciena had forecasted revenues for the quarter to fall between $540 to $570 million, while Thomson Reuters reported that their network of financial analysts expected revenues of around $558 million. The actual figure also represented a year-on-year drop from the $553.7 million of 1Q14.

On a GAAP basis, the company reported a net loss for the quarter of $18.8 million ($0.17 per diluted common share), which also suffered in comparison to the year-ago quarter (a net loss of $15.9 million, or $0.15 per diluted common share. On a non-GAAP basis, the company reported net income of $13.6 million ($0.12 per diluted common share). While that also represented a decline for last year's net income of $13.7 million ($0.13 per diluted common share), it did beat analysts' expectations by $0.09.

Both GAAP and non-GAAP gross margins exceeded 1Q14 figures. Ciena reported GAAP gross margin for the recently concluded quarter of 43.5% (versus 42.3% last year) and non-GAAP gross margin of 44.1% (compared to 43.4% in the first quarter of 2014).

"Our first quarter performance is highlighted by continued customer diversification, an expanding portfolio, and strong profitability. While order timing and foreign exchange headwinds impacted revenue in the quarter, we delivered improved gross margin and excellent operating profit," said Gary B. Smith, president and CEO of Ciena, via a press release announcing the quarterly results. "We are consistently delivering on our business model and are well positioned to capitalize on our leadership in driving an open, global network for the cloud."

Smith had stressed the company's desire to expand its business among non-traditional network operators during the last earnings call (see "Ciena believes diversification will lead to growth"). The company recently announced new technology that it believes should play well with such customers (see "Ciena offers new WaveLogic chips, architecture, switches for 'web-scale world'").

Looking ahead to the fiscal second quarter of 2015, Ciena management said they expect revenue to range between $585 million and $615 million, with non-GAAP gross margin between 42% and 43%.

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