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Packet-Optical

Ciena Watchers Expecting Solid Q3 Results

Ciena gets the unenviable task this Thursday of reporting quarterly earnings during a week when financial markets once gain have been plunging. However, the news in Ciena's case is expected to be pretty positive.

Ciena Corp. (NYSE: CIEN) will report fiscal third-quarter earnings before markets open on Thursday morning, and is expected to offer revenue results in line or better than most estimates, according to sell-side analysts. "We hold a favorable bias and see results coming in near the high end of guidance for sales of $610-640 million, which compares to our $634 million and current consensus estimate for $629 million," Raymond James analysts wrote in a research note last week.

MKM Partners Managing Director Michael Genovese also stated that sales should "have little trouble meeting or beating" his estimate of $628.5 million, thanks in part to a ramping up of 100G metro optical sales. Ciena was seen as one of the big winners for Verizon's metro business earlier this year. (See Cisco Scores 'Shocking' 100G Metro Deal at Verizon.)

Ciena recently completed its acquisition of SDN pioneer Cyan, and also is expected to benefit from increasing high-margin sales of Cyan's Blue Planet software. Not long before Ciena announced its bid to acquire Cyan, the smaller vendor showed long awaited progress in converting its software trials into sales by earning a key deployment at CenturyLink Inc. (NYSE: CTL). (See Ciena Absorbs Cyan for New IP Onslaught, Ciena's Cyan Buy: It's All About the Software and Cyan's CenturyLink Win Built on Experience, Flexibility.)


Want to know more about the packet optical sector? Check out our dedicated packet optical content channel right here on Light Reading.


The earnings report, however, also comes as the vendor recently has seen two sales leaders announce their departures from the company. Global sales head Philippe Morin will be leaving Ciena on October 31 to become COO of EXFO (Nasdaq: EXFO; Toronto: EXF), and Northern Europe sales director Nick Walden has been hired away to become direct competitor Infinera Corp. (Nasdaq: INFN)'s senior vice president of sales. (See EXFO Hires Philippe Morin as COO and Infinera Nabs EMEA Sales Exec From Ciena.)

Analysts did not view Morin's departure as a major negative event, since it appeared he's moving into a C-level job that might not have been available to him at Ciena. When contacted by Light Reading about the departures, Ciena said via e-mail, "We have an incredibly strong and stable management team in place and have experienced very little management turnover through our years. We have strong succession plans in place across the organization, including at leadership levels. We're exercising those plans, while also taking this as an opportunity to ensure an optimal structure that allows us to best meet our customers' needs and seize market opportunity. Any changes to our go-to-market organization structure will be in place by the time Philippe leaves."

— Dan O'Shea, Managing Editor, Light Reading

[email protected] 9/2/2015 | 4:27:47 AM
Cyan and the metro Two things I am looking out for:

 

When Ciena breaks out its financial reporting of the Blue Planet Division (ex Cyan + Ciena Agility) to provide quarterly sales and margin analysis (just because it would be interesting!)

If Ciena regularly breaks down its 100G metro sales by application and customer type (traditional telco, data center operator etc)
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