Telecommunications network specialist
Ciena
Corp.
(
CIEN
) is scheduled to release its fiscal fourth quarter 2012 earnings
results before the opening bell on December 13, 2012. In the
run-up to the earnings release, we do not notice any revision in
analysts' estimates.
Prior-Quarter Recap
Ciena's top line increased 8.9% year over year in the third
quarter primarily due to higher demand for the company's products
and services. However, the company reported a loss of 4 cents on
non-GAAP basis, which worsened from the previous-year quarter's
loss of 8 cents.
Ciena expects fourth quarter 2012 revenues in the range of
$455.0 million to $480.0 million. The Zacks Consensus Estimate
projects Ciena to earn revenues of $469.0 million. Adjusted gross
margin is projected to be at 40%, consistent with the company's
near-term expectation. Management expects adjusted operating
expenses to be around low $180 million range.
For further details please read:
Ciena Beats, Still Posts Loss
Estimate Revision Trend
In the last 30 days, none of the 6 analysts covering the stock
revised estimates. Therefore, estimated loss per share was pinned
at 14 cents.
Analysts covering the stock expect Ciena to report in-line
results, while margins are projected to remain under pressure in
the near term. Analysts expect Ciena to report
better-than-expected FY13 due to Tier 1 operators such as
Verizon
(
VZ
) and
AT&T
(
T
) deploying Ciena's 100G coherent transport and OTN switching
platforms. On the contrary, analysts remain cautious about the
competitive product pricing, margin contractions and weak demand
in the European market.
Recommendation
Ciena has posted average earnings surprise of a negative 1.53%
in the trailing four quarters. The company reported losses in the
past two quarters, but they were narrower than the Zacks
Consensus Estimate. Thus, we anticipate the company to recover on
the back of favorable operational execution and the new product
line up. Going forward, these factors would lead to a gradual
improvement in results.
Moreover, we expect multi-year optical upgrades to act as a
positive catalyst for the company over the long term. We believe
that increasing spending on optical upgrades will help the
company to counter sluggish macroeconomic conditions going
forward.
However, we cannot undermine the near-term headwinds such as
delays in revenue recognition due to new project ramp ups,
increased expenses, slowdown in carrier spending and intensifying
competition from its peers.
We have a long-term Outperform recommendation on Ciena.
Currently, Ciena has a Zacks #3 Rank (Hold).
CIENA CORP (CIEN): Free Stock Analysis Report
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VERIZON COMM (VZ): Free Stock Analysis Report
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