Ciena Q3 Loss Narrows; Adj. Profit, Revenue Beat View

(RTTNews) - Network specialist Ciena Corp. (CIEN) reported Wednesday a narrower net loss for the third quarter, benefited by higher margin and revenues. Adjusted net profit as well as top line beat market estimates. The company also issued fourth-quarter revenue forecast. In the pre-market activity, shares were gaining around 10 percent.

The company's net loss for the third quarter narrowed to $1.23 million or $0.01 per share from $29.82 million or $0.30 per share a year ago. Adjusted net profit for the third quarter was $26.21 million or $0.23 per share, compared to an adjusted net loss of $4.1 million or $0.04 per share a year ago. On average, 20 analysts polled by Thomson Reuters expected the company to report earnings of $0.16 per share for the quarter. Analysts' estimates typically exclude special items.

Pre-tax income was $692 thousand, compared to last year's loss of $27.33 million. Income from operations was $14.83 million, compared to a loss from operations of $15.27 million in the prior year.

In the quarter, gross margin was 42.4 percent, higher than 38.2 percent a year ago. Operating margin was 2.8 percent, while last year's negative operating margin was 3.2 percent.

Adjusted gross margin grew to 43.6 percent from 39.6 percent last year, and adjusted operating margin improved to 8.2 percent from 2.5 percent in the prior year.

Total revenue for the quarter was $538.4 million, 13.6 percent higher than last year's $474.10 million. Twenty One analysts had consensus revenue estimate of $533.51 million for the quarter.

In the quarter, converged packet optical, packet networking, as well as software and services segments posted higher revenues, which were partly offset by lower results from optical transport segment.

The company noted that non-U.S. customers contributed 37 percent of total revenues, while two customers accounted for greater than 10 percent of revenue, and 31.8 percent of total revenues.

Gary Smith, president and CEO, said, "...we have increased our market share, achieved steady growth, and delivered improved and more consistent financial performance over the last several quarters. We believe that by expanding our role in the industry and extending our reach within our markets, we will be positioned to deliver greater profitability that is more sustainable over time." Looking ahead for the fourth quarter, the company expects revenue to be in the range of $550 million to $580 million, while analysts project revenues of $551.39 million. Adjusted gross margin for the quarter is projected in the low 40s percent range.

Ciena shares closed Tuesday's trading at $20.68, up $0.76 or 3.82 percent. In the pre-market activity, shares were gaining $2.02 or 9.77 percent, and trading at $22.70.