Ciena keeps winning streak alive in fiscal third quarter
Building on several consecutive quarters of exceeding analyst expectations, optical transport and Carrier Ethernet systems vendor Ciena Corp. (NASDAQ: CIEN) reported revenues for its fiscal third quarter ended July 31, 2013 of $538.4 million. The figure fell within the company’s guidance of $515 million to $545 million but still exceeded Wall Street consensus estimates by nearly $5.5 million.
Building on several consecutive quarters of exceeding analyst expectations, optical transport and Carrier Ethernet systems vendor Ciena Corp. (NASDAQ: CIEN) reported revenues for its fiscal third quarter ended July 31, 2013 of $538.4 million. The figure fell within the company’s guidance of $515 million to $545 million (see "Ciena fiscal second quarter 2013 keeps momentum going") but still exceeded Wall Street consensus estimates by nearly $5.5 million.
The sales success did not prevent the company from reporting a GAAP loss. However, GAAP net loss for the quarter of $1.2 million ($0.01 per common share), was a significant improvement over the year-ago quarter (when it recorded a GAAP net loss of $29.8 million, or $0.30 per common share) and the previous quarter (which saw a GAAP net loss of $27.1 million, or $0.27 per common share).
On a non-GAAP basis, Ciena's reported net income of $26.2 million ($0.23 per common share), again better than the third quarter of 2012 (a net loss of $4.1 million, or $0.04 per common share) and this year’s prior quarter (positive $2.2 million, or $0.02 per common share). Non-GAAP earnings per share for the recently concluded quarter beat the Street’s expectations by $0.07.
GAAP gross margin for the quarter was 42.4% versus 41.3% in the prior quarter and 38.2% in 3Q12. On a non-GAAP basis, Ciena said it saw gross margin of 43.6%, an improvement over the 42.5% of the second quarter of this year and the 39.6% achieved in the year-ago quarter.
"We believe that diversifying the vertical and geographic mix of our customers and expanding the types of applications we're addressing within our existing customer accounts will lessen revenue concentration due to any single application in a particular customer,” Gary Smith, president and CEO, told participants on an analyst call yesterday. “In Q3, we saw several indicators of progress in these areas. For instance, we expanded our presence with multiple Tier 1 wins across multiple geographies, including Europe, Brazil and India. And in our vertical markets, we have recently secured key wins with Internet content providers. And in terms of applications within our accounts, as of Q3, 16 of our top 20 customers rely on Ciena in multiple applications across their business, such as metro, long haul, Mobile Backhaul and Ethernet business services. We believe this is a valuable measure of diversification and strategic value because it demonstrates our involvement in more elements of a customer's business."
Ciena expects to continue its upward momentum in the current quarter. For the fiscal four quarter, company management say they expect revenue in the range of $550 to $580 million. Non-GAAP gross margin will be in the low 40% percent range, with non-GAAP operating expense in the high $190s million range.
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