Ciena Earnings Beat Expectations
Communications equipment maker Ciena Corp. reported a better-than-expected quarterly profit on sharply higher revenue and lower expenses, sending its shares as much as 10% higher.
The Maryland based company also gave first-quarter profit outlook in a range that outpaced consensus expectations.
The company posted a net profit of $13.1 million, or 14 cents a share, in the fiscal fourth quarter ending Oct. 31, compared with a net loss of $252.9 million, or $3.06 a share, a year earlier, when it booked an impairment charge for goodwill and other assets of $222.3 million.
Excluding items, Ciena, which makes equipment to help move data over fiber-optic networks, posted a profit of 16 cents a share, beating the average Wall Street estimate of 12 cents a share, according to Reuters Estimates.
Revenue rose 35.3% to $160 million, matching estimates.
"We believe there was some expectation (financial results) could come in light," Morgan Keegan & Co. analyst Simon Leopold said. "Several customers including BT and Sprint were better customers in the quarter, offsetting weakness in traditional baby bells AT&T, BellSouth and Verizon."
Keegan said Ciena spent less on research and development, which was $26.6 million, in its fiscal fourth quarter than he expected. Keegan expected the firm to spend $27.1 million.
Total operating expense for the fourth quarter fell to $68.9 million from $301.8 million a year ago, Ciena said.
Looking ahead, the company said it expected revenue to rise by a low single-digit percentage rate in the first quarter of 2007.
Ciena expects first-quarter net profit per share to come in at between 9 cents and 14 cents. Excluding items, profit per share is expected to reach 19 cents to 24 cents. Consensus expectations were that the company would post a first-quarter profit of 19 cents.
"Based on our current order pipeline we see growth improving during the balance of the year," Ciena said in a statement.