Ciena's Q4 Beats the Street
For the three months ended October 31, the optical equipment vendor reported earnings of $30.4 million, or 30 cents a share, on revenues of $216.2 million. That compares with earnings of $13.1 million, or 14 cents per share, on sales of $160 million in the year-ago quarter.
Ciena's quarterly revenues grew 5.5 percent sequentially and 35.2 percent year over year, beating Wall Street expectations. Analysts expected quarterly sales of $211 million, according to Thomson Financial .
Excluding certain one-time and non-cash items, Ciena reported fourth-quarter earnings of $50.3 million, or 48 cents per share. That beat analyst expectations for profits of 42 cents per share.
Gross margins for the quarter were strong, at 50.5 percent. That beat Ciena's forecast of the mid-40s and analyst expectations of 46.7 percent. For the 2007 fiscal year, Ciena reported earnings of $82.8 million million, or 87 cents a share, on revenues of $779.8 million. That compares with earnings of $600,000, or 1 cent per share, on sales of $564.1 million in fiscal 2006.
Ciena has now reported 15 consecutive quarters of sequential revenue growth. The company's stock has responded to that trend, rising more than 50 percent this calendar year.
But despite today's positive news, the vendor's outlook for "20 percent annual revenue growth in fiscal 2008" fell short of analyst expectations. A 20 percent hike would take Ciena's fiscal 2008 revenues to about $936 million, whereas analysts were, on average, predicting $945.4 million.
As a result Ciena's share price was flat at $42.12 in early trading Thursday morning.
In the fourth quarter Ciena benefited from revenue recognition at previously announced customers BT Group plc (NYSE: BT; London: BTA) and India's Bharat Sanchar Nigam Ltd. (BSNL) , and signed new deals with AboveNet Inc. (NYSE: ABVT) and Videsh Sanchar Nigam Ltd. (VSNL) (NYSE: VSL). (See VSNL Chooses Ciena.)
The vendor also announced today a new contract at BT to supply Ethernet access equipment for the carrier's 21CN initiative. The announcement expands Ciena's current relationship with BT, which is already deploying the firm's CN 4200 and CoreDirector as part of its 21CN project. (See Ciena Takes ANDA Into 21CN.)
Ciena also announced the appointment of James E. Moylan Jr. as its new CFO. Moylan previously served as EVP and CFO at Swett & Crawford, a private equity-owned wholesale insurance broker. Moylan replaces Joseph Chinnici, who quit in April. (See Ciena's CFO Quits.)
— Ryan Lawler, Reporter, Light Reading