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Ciena Corporation (CIEN - Free Report) reported third-quarter fiscal 2024 (ended July 27) adjusted earnings per share (EPS) of 35 cents, which beat the Zacks Consensus Estimate of 26 cents. Earnings plunged 40.7% year over year.
Total revenues were down 11.8% year over year to $942.3 million in the reported quarter. However, the top line surpassed the Zacks Consensus Estimate by 1.4%.
A slower-than-expected recovery of order volumes from international service providers drove the year-over-year decrease. This includes cautious purchase behavior from European service providers due to macroeconomic and geopolitical turmoil in the region. However, management highlighted the expansion of its service business in India, South Asia, Germany, Scandinavia and North America in the fiscal third quarter.
Continued momentum with cloud and AI infrastructure is a plus. Direct Cloud Provider revenues went up 9% sequentially, driven by new customer wins from major cloud providers across terrestrial, submarine and coherent pluggable applications. Following the earnings announcement, shares of CIEN declined 1.69% in the pre-market trading on Sept., 4.
Segment Results
Total revenues in Networking Platforms (74.2% of total revenues) decreased 17.4% year over year to $699.5 million. We expected the metric to be $693.5 million.
Platform Software and Services’ revenues (8.9%) totaled $83.2 million, up 5.5% from the prior year. We projected the metric to be $79.7 million.
Blue Planet Automation Software and Services’ revenues (2.7%) rose 97% to $25.8 million. We anticipated the metric to be $25.1 million.
Total revenues in Global Services (14.2%) were $133.8 million, up 3.5% year over year. Our estimate for segmental revenues was $126.2 million.
Ciena Corporation Price, Consensus and EPS Surprise
Region-wise, revenues in the Americas were $718.6 million, down 4.1% year over year. Europe, the Middle East and Africa generated $135 million in revenues, down 11.6% from the prior-year levels. Revenues in the Asia Pacific totaled $88.7 million, down 46.4%.
Non-telco customer revenues represented 46% of total revenues in the fiscal third quarter. Two 10%-plus customers represented 26.6% of the top line in the reported quarter. In the quarter under review, CIEN added 12 new customers for WaveLogic 5 Extreme, bringing the total customer count to more than 300.
WaveLogic 6 Extreme is picking up pace, and management expects to witness top-line growth in the fiscal fourth quarter on increased adoption. So far, it has secured orders from 23 customers for WaveLogic 6 Extreme.
Other Details
Non-GAAP adjusted gross margin was 43.7% compared with 42.7% a year ago. Adjusted operating expenses were $336 million, up 2.5%.
Non-GAAP adjusted operating margin was 8% compared with 12% in the year-earlier quarter. Non-GAAP adjusted EBITDA decreased 34.9% to $98.5 million.
Cash Flow & Liquidity
For the quarter that ended on July 27, 2024, Ciena’s net cash used in operating activities was $159.4 million against $9 million net cash generated in the prior-year quarter.
As of July 27, the company had $1.2 billion in cash and investments and $1,538.3 million of net long-term debt.
In the reported quarter, CIEN repurchased about 600,000 shares worth $29 million. It plans to buy back a total of $250 million in shares by the end of fiscal 2024.
Guidance
For the fourth quarter of fiscal 2024, management expects revenues in the range of $1,060- $1,140 million. The adjusted gross margin is estimated in the low to mid 40% range. Adjusted operating expenses are projected to be $350 million.
CIEN’s Zacks Rank
Ciena currently has a Zacks Rank #3 (Hold).
Performance of Other Companies
BlackBerry’s (BB - Free Report) first-quarter fiscal 2025 adjusted loss per share of 3 cents was narrower than the company’s estimate of a loss of 4-6 cents. In the year-ago quarter, it reported non-GAAP earnings of 6 cents per share. The Zacks Consensus Estimate was pegged at a loss of 4 cents per share. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shares of BB have lost 59.1% in the past year.
Badger Meter, Inc (BMI - Free Report) reported earnings per share (EPS) of $1.12 for second-quarter 2024, beating the Zacks Consensus Estimate by 14.3%. Also, the bottom line compared favorably with the year-ago quarter’s EPS of 76 cents.
Shares of BMI have gained 20.6% in the past year.
SAP SE (SAP - Free Report) reported second-quarter 2024 non-IFRS earnings of €1.10 ($1.18) per share, climbing 59% from the year-ago quarter’s levels. The Zacks Consensus Estimate was pegged at $1.01.
In the past year, shares of SAP have gained 56.5%.
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Ciena Corporation (CIEN - Free Report) reported third-quarter fiscal 2024 (ended July 27) adjusted earnings per share (EPS) of 35 cents, which beat the Zacks Consensus Estimate of 26 cents. Earnings plunged 40.7% year over year.
Total revenues were down 11.8% year over year to $942.3 million in the reported quarter. However, the top line surpassed the Zacks Consensus Estimate by 1.4%.
A slower-than-expected recovery of order volumes from international service providers drove the year-over-year decrease. This includes cautious purchase behavior from European service providers due to macroeconomic and geopolitical turmoil in the region. However, management highlighted the expansion of its service business in India, South Asia, Germany, Scandinavia and North America in the fiscal third quarter.
Continued momentum with cloud and AI infrastructure is a plus. Direct Cloud Provider revenues went up 9% sequentially, driven by new customer wins from major cloud providers across terrestrial, submarine and coherent pluggable applications. Following the earnings announcement, shares of CIEN declined 1.69% in the pre-market trading on Sept., 4.
Segment Results
Total revenues in Networking Platforms (74.2% of total revenues) decreased 17.4% year over year to $699.5 million. We expected the metric to be $693.5 million.
Platform Software and Services’ revenues (8.9%) totaled $83.2 million, up 5.5% from the prior year. We projected the metric to be $79.7 million.
Blue Planet Automation Software and Services’ revenues (2.7%) rose 97% to $25.8 million. We anticipated the metric to be $25.1 million.
Total revenues in Global Services (14.2%) were $133.8 million, up 3.5% year over year. Our estimate for segmental revenues was $126.2 million.
Ciena Corporation Price, Consensus and EPS Surprise
Ciena Corporation price-consensus-eps-surprise-chart | Ciena Corporation Quote
Region-wise, revenues in the Americas were $718.6 million, down 4.1% year over year. Europe, the Middle East and Africa generated $135 million in revenues, down 11.6% from the prior-year levels. Revenues in the Asia Pacific totaled $88.7 million, down 46.4%.
Non-telco customer revenues represented 46% of total revenues in the fiscal third quarter. Two 10%-plus customers represented 26.6% of the top line in the reported quarter. In the quarter under review, CIEN added 12 new customers for WaveLogic 5 Extreme, bringing the total customer count to more than 300.
WaveLogic 6 Extreme is picking up pace, and management expects to witness top-line growth in the fiscal fourth quarter on increased adoption. So far, it has secured orders from 23 customers for WaveLogic 6 Extreme.
Other Details
Non-GAAP adjusted gross margin was 43.7% compared with 42.7% a year ago. Adjusted operating expenses were $336 million, up 2.5%.
Non-GAAP adjusted operating margin was 8% compared with 12% in the year-earlier quarter. Non-GAAP adjusted EBITDA decreased 34.9% to $98.5 million.
Cash Flow & Liquidity
For the quarter that ended on July 27, 2024, Ciena’s net cash used in operating activities was $159.4 million against $9 million net cash generated in the prior-year quarter.
As of July 27, the company had $1.2 billion in cash and investments and $1,538.3 million of net long-term debt.
In the reported quarter, CIEN repurchased about 600,000 shares worth $29 million. It plans to buy back a total of $250 million in shares by the end of fiscal 2024.
Guidance
For the fourth quarter of fiscal 2024, management expects revenues in the range of $1,060- $1,140 million. The adjusted gross margin is estimated in the low to mid 40% range. Adjusted operating expenses are projected to be $350 million.
CIEN’s Zacks Rank
Ciena currently has a Zacks Rank #3 (Hold).
Performance of Other Companies
BlackBerry’s (BB - Free Report) first-quarter fiscal 2025 adjusted loss per share of 3 cents was narrower than the company’s estimate of a loss of 4-6 cents. In the year-ago quarter, it reported non-GAAP earnings of 6 cents per share. The Zacks Consensus Estimate was pegged at a loss of 4 cents per share. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shares of BB have lost 59.1% in the past year.
Badger Meter, Inc (BMI - Free Report) reported earnings per share (EPS) of $1.12 for second-quarter 2024, beating the Zacks Consensus Estimate by 14.3%. Also, the bottom line compared favorably with the year-ago quarter’s EPS of 76 cents.
Shares of BMI have gained 20.6% in the past year.
SAP SE (SAP - Free Report) reported second-quarter 2024 non-IFRS earnings of €1.10 ($1.18) per share, climbing 59% from the year-ago quarter’s levels. The Zacks Consensus Estimate was pegged at $1.01.
In the past year, shares of SAP have gained 56.5%.