Ciena Corp. (NYSE: CIEN) announced today that it expects to miss its revenue guidance for the fiscal first quarter ended January 29, 2022. The company says that it expects to reveal on March 7, 2022, that revenues for the quarter will fall between $840 million and $850 million versus guidance of $870 million to $910 million. The company blamed a last-minute delay in the delivery of necessary components and a brief manufacturing hiccough for the shortfall – events company management says it expects won’t be repeated.
The company anticipates that it will stay within guidance or exceed it on other important metrics for the quarter. GAAP gross margin is expected to be approximately 44% to 45%, while adjusted (non-GAAP) gross margin is expected to be approximately 45% to 46%, at the high end of the previous guidance of 43% to 46%. Ciena expects GAAP operating expense to be approximately $324 million, with adjusted operating expense for the quarter at approximately $290 million, in line with the previous guidance.
On a call today to discuss the announcement, President and CEO Gary Smith, CFO Jim Moylan, and Senior Vice President of Products and Services Scott McFeely stated that delays in deliveries of such components as semiconductors, ICs, and memory devices, coupled with a COVID-related interruption in manufacturing capacity, both toward the tail end of the quarter, combined to cause the anticipated revenue miss. They said that both issues have been cleared up (the components arrived, just too late to be turned into products during the quarter, for example). Smith said that while he doesn’t expect lead times for such components to improve for the rest of this year, the company has adjusted its ordering – an action he believes will take full effect in the second half of this year.
Smith emphasized that the revenue slippage has nothing to do with demand for its products. In fact, company management on the call said that orders for the year likely will be higher than they had forecasted. For this reason, Smith and the other members of Ciena’s senior management team expressed confidence that the company will reach the financial performance goals established going into the current fiscal year, including for revenue.
“The combination of a very positive demand environment as well as expanding supply chain capacity aligned with increased visibility into the remainder of the year based on our order flow and backlog, provides us greater confidence in our ability to achieve our fiscal 2022 financial objectives. Accordingly, we continue to expect to achieve our revenue guidance of 11% to 13% annual growth for fiscal 2022,” Smith stated via a press release that announced the preliminary results.
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