Ciena Q2 Results Top Estimates, Guides Q3 Revenues In Line

(RTTNews) - Network specialist Ciena Corp. (CIEN) reported Thursday a profit for the second quarter compared to a loss last year, reflecting improved operating margins and a revenue growth.

Both adjusted earnings per share and quarterly revenues topped analysts' expectations. The company also provided revenue guidance for the third quarter, in line with Street view.

"We delivered outstanding second quarter results that, when combined with our strong financial performance during the past several quarters, demonstrate increased operating leverage and sustained momentum in our business. This performance also reflects our industry-leading ability to deliver open, on-demand, software-driven networks for an increasingly diverse set of customers across the globe," President and CEO Gary Smith said.

The Hanover, Maryland-based telecommunications networking equipment maker reported net income of $20.65 million or $0.17 per share for the second quarter, compared to a net loss of $10.16 million or $0.10 per share in the prior-year quarter.

Excluding items, adjusted net income for the quarter was $47.34 million or $0.35 per share, compared to $19.42 million or $0.17 per share in the year-ago quarter.

On average, 20 analysts polled by Thomson Reuters expected the company to report earnings of $0.24 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the quarter grew 11 percent to $621.60 million from $560.06 million in the same quarter last year, and topped nineteen Wall Street analysts' consensus estimate of $606.53 million.

Converged packet optical revenues grew to $432.9 million from $356.8 million, while packet networking revenues declined to $53.3 million from $66.6 million a year ago.

Optical transport revenues nearly halved to $16.5 million from $29.6 million, while software services revenue increased to $118.9 million from $107.1 million last year.

The company noted that U.S. customers contributed 59.1 percent of the revenues, and one 10 percent-plus customer represented a total of 19 percent of total quarterly revenue.

Operating margin for the quarter improved 550 basis points to 6.8 percent from a year ago as gross margin expanded 140 basis points to 43.8 percent from last year.

Looking ahead to the third quarter, Ciena expects revenues in a range of $610 million to $640 million and adjusted gross margin of about 43 percent. Analysts expect the company to report revenues of $632.18 million for the quarter.

CIEN closed Wednesday's regular trading session at $24.44, down $0.13 on a volume of 6.26 million shares.