Ciena (CIEN) Q3 Results Highlight Challenges in Telecom Networking Solutions Segment
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Price: $15.51 +0.19%
EPS Growth %: +185.7%
Financial Fact:
Services: 60.78M
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EPS Growth %: +185.7%
Financial Fact:
Services: 60.78M
Today's EPS Names:
ANF, DXLG, FL, More
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Major communications networking solutions player Ciena Corp. (Nasdaq: CIEN) may be getting sucked into the void shared by such names as Nokia Siemens (NYSE: NOK)(NYSE: SI), Alcatel-Lucent (NYSE: ALU), and Tellabs (Nasdaq: TLABS)
Ciena issued third-quarter 2012 numbers earlier this morning. Sales rose 8.9 percent to $474.1 million. On an adjusted basis, Ciena swung to a loss of $4.12 million, or 4 cents per share, from profit of $8.29 million last year.
Overall, the consensus was expecting a loss of 2 cents per share with sales of $473.4 million.
Mainly, the loss comes from a narrowing of margins on an adjusted basis, by about 1.3 points to 2.5 percent.
Switching and carrier-ethernet sales both slipped, leading Ciena to rely on packet-optical transport and software/service sales for growth.
"We are experiencing the effects of ongoing macroeconomic challenges and slower than expected roll-outs of new design wins," commented CEO Gary Smith. "However, our approach to the market is working, our OPn architecture vision is gaining traction with customers globally, and our view of the long-term opportunity is unchanged."
Looking to the next quarter, Ciena said it expects sales of $455 million to $480 million and adjusted gross margin of 40 percent (from 39.6 percent in the recent quarter and 44.1 percent in the same period last year). The Street was modeling for sales of $499.5 million.
In addition to the above named companies, traders will eye larger names like Cisco (Nasdaq: CSCO), Ericsson (Nasdaq: ERIC), and Juniper Networks (NYSE: JNPR) as well today. Amid Ciena's troubles, Cisco recently reported stronger than expected results for its fiscal fourth quarter. As sales rose 4.4 percent, net income jumped 56 percent in the period.
Just yesterday, news had Nokia Siemens looking to unload its Business Support Systems unit to stem losses at the joint venture. Nokia and Siemens sought to sell the joint venture last year, but bids coming in far below expectations snubbed those plans. The joint venture has been losing money since it was formed in 2007.
Alcatel has also faced pressure. With a market cap of just $2.6 billion, the French communication networking equipment giant is just 1/10 the size it was five years ago.
Ciena shares are flat ahead of the bell Thursday.
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Ciena issued third-quarter 2012 numbers earlier this morning. Sales rose 8.9 percent to $474.1 million. On an adjusted basis, Ciena swung to a loss of $4.12 million, or 4 cents per share, from profit of $8.29 million last year.
Overall, the consensus was expecting a loss of 2 cents per share with sales of $473.4 million.
Mainly, the loss comes from a narrowing of margins on an adjusted basis, by about 1.3 points to 2.5 percent.
Switching and carrier-ethernet sales both slipped, leading Ciena to rely on packet-optical transport and software/service sales for growth.
"We are experiencing the effects of ongoing macroeconomic challenges and slower than expected roll-outs of new design wins," commented CEO Gary Smith. "However, our approach to the market is working, our OPn architecture vision is gaining traction with customers globally, and our view of the long-term opportunity is unchanged."
Looking to the next quarter, Ciena said it expects sales of $455 million to $480 million and adjusted gross margin of 40 percent (from 39.6 percent in the recent quarter and 44.1 percent in the same period last year). The Street was modeling for sales of $499.5 million.
In addition to the above named companies, traders will eye larger names like Cisco (Nasdaq: CSCO), Ericsson (Nasdaq: ERIC), and Juniper Networks (NYSE: JNPR) as well today. Amid Ciena's troubles, Cisco recently reported stronger than expected results for its fiscal fourth quarter. As sales rose 4.4 percent, net income jumped 56 percent in the period.
Just yesterday, news had Nokia Siemens looking to unload its Business Support Systems unit to stem losses at the joint venture. Nokia and Siemens sought to sell the joint venture last year, but bids coming in far below expectations snubbed those plans. The joint venture has been losing money since it was formed in 2007.
Alcatel has also faced pressure. With a market cap of just $2.6 billion, the French communication networking equipment giant is just 1/10 the size it was five years ago.
Ciena shares are flat ahead of the bell Thursday.
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