Networking equipment and software solutions provider, Ciena Corporation (NASDAQ: CIEN) said on Thursday that fiscal second quarter loss narrowed, aided by higher revenue and improved gross margin.
Shares rallied as adjusted earnings edged past analysts’ estimate while Company’s revenue guidance on the current quarter also topped expectation.
Although the Company’s top line growth benefitted in the recent past due to steady improvement in the optical-communications equipment market, charges related to depreciation and amortization including provisions for surplus inventories have put the pressure on the bottom line.
For the second quarter ended April 30, the Hanover, Maryland-based reported a loss of $27.1 million or 27 cents a share compared to a loss $27.8 million or 28 cents a share, in the same quarter of last year.
Stripping out onetime items such as stock based compensation and amortization of an intangible asset, adjusted earnings came at 2 cents a share down from 4 cents a share, in the year-earlier quarter.
Analysts’ consensus estimate was for a loss of penny a share, according to a data compiled by Thomson Reuters.
Revenue rose 6.3% to $507.7 million. Earlier in March the Company projected revenue to be in the range of $465 million to $495 million.
Gross margin widened to 41.3% from 38.3% in the same quarter of last year.
“We have designed Ciena to take advantage of the fundamental shift in network architecture driven by changing end-user demands, and our strong quarterly and first half of 2013 performance are a direct result of that strategy,” said Ciena’s Chief Executive Gary Smith in a statement.
Product revenue rose 7.2% to $413.2 million while service revenue edged up 1.7% to $94.5 million. Segment wise, revenue from Converged Packet Optical revenue rose more than 10% to $291.4 million while revenue from Packet Networking soared 91% to $57.1 million.
The Company said that 43% of the total revenue was generated by non-U.S. customers.
For the current quarter, Ciena expects revenue to be in the range of $515 million to $545 million. Analysts’ consensus estimate was for revenue of $509.46 million.
The stock was climbing about 12.75% by early trade on Thursday.
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