Topics Topics Help/Instructions Help Edit Profile Profile Member List Register Paatha Gnyapakaalu - Archives from Old DB  
Search New Posts 1 | 2 | 8 Hours Search New Posts 1 | 3 | 7 Days Search Search Tree View Tree View Latest tweets Live Tweets   Hide Images

Rate this post by selecting a number. 1 is the worst and 5 is the best.

    (Worst)    1    2    3    4    5     (Best)

Author Message
Top of pagePrevious messageNext messageBottom of page Link to this message

Entrepreneur
Kurra Bewarse
Username: Entrepreneur

Post Number: 3350
Registered: 05-2011
Posted From: 65.35.45.47

Rating: N/A
Votes: 0

Posted on Thursday, March 04, 2021 - 7:01 pm:   

Ciena dials up a welcome surprise with earnings/guidance; 2H rebound looks on schedule (CIEN)
Updated: 04-Mar-21 13:43 ET
Ciena (CIEN -1%) dialed up a strong Q1 (Jan) earnings report this morning. The telecom and networking equipment giant has been pretty hit-or-miss around earnings, but today's report was quite encouraging.

The quarter's EPS upside was a bit of a surprise because while the pandemic and working from home has increased demand for bandwidth amid growing network traffic, Ciena has not been a primary beneficiary of that shift. Its service provider customers are generally risk-adverse in terms of spending on equipment these days. Instead, they are running their current networks "hotter" and focusing more on access points as opposed to the metro and the core, which are Ciena's bread-and-butter.
Coming into this quarter, Ciena had reported an EPS miss in two of the past five quarters, including a $0.03 miss in Q4 (Oct). As such, the $0.07 EPS beat this quarter was a pleasant surprise. Ciena does not guide for EPS, so seeing where EPS ends up is always a bit of an adventure.
What stands out even more is the in-line revenue guidance for Q2 (Apr) at $810-840 mln. CIEN had guided revenue below consensus in each of the past four quarters, so in-line guidance is music to investors' ears.
Last quarter, Ciena's view was that the pandemic would hurt orders in the first half of FY21 but that Ciena's pipeline of new activity would kick in the second half of the fiscal year because secular demand for things like 5G needs network infrastructure to be successful. Our thought heading into this report was that we were just hoping Ciena would not kick the can further down the road in terms of the recovery. It turns out that Ciena was pretty bullish, to our surprise.
The company conceded that it still saw Tier 1 service providers, primarily in North America, remain financially cautious. However, Ciena also said it's seeing encouraging early signs of improvement. In fact, orders in Q1 slightly exceeded revenue for the first time since 1H20. These trends are giving Ciena increased confidence for a strong second half performance this year. Ciena also remains very confident in its competitive position, and it continues to take share.
In sum, we were holding our breath coming into this report. Ciena previously laid out a plan for a rough Q1-Q2 to be followed by a big rebound in Q3-Q4. We are relieved that this trajectory remains in place, and Ciena's bullish comments strengthens our confidence in this outlook. Investors must be frustrated that Ciena has not benefited more from the pandemic-fueled acceleration in bandwidth consumption. However, Ciena's day will come. While many customers are running their networks hotter right now, these networks will eventually need to be augmented with additional capacity to maintain performance, especially as 5G ramps up.

Topics | Last Hour | Last Day | Last Week | Tree View | Search | Help/Instructions | Program Credits Administration