) is scheduled to release its first quarter 2013 results on March
7. Though the company posted a negative surprise of 14.3% in the
last quarter, Ciena posted an average surprise of +4.9% over the
last four quarters. Let's see how things are shaping up for the
company in this quarter.
Factors Affecting Growth this Past Quarter
Ciena reported dismal fourth-quarter results with the top line
failing to meet the Zacks Consensus Estimate. Ciena's loss per
share widened on a year-over-year basis.
The company also reported margin contractions due to
unfavorable product mix and higher-than-expected operating
Ciena expects a tepid first quarter due to reductions in order
volume and deployment activity owing to the holiday season. For
2013, management remains optimistic and expects to gain market
share, driven by continued spending from telecom carriers that
remain focused on upgrading their networks. However, management
hinted at subdued gross margins due to start-up costs related to
new orders and its deployments.
The Zacks Consensus Estimate for the first quarter stands at a
loss of 25 cents per share while that for fiscal 2013 stands at a
loss of 29 cents per share.
There have been no revisions in the first quarter and 2013
estimates over the last 60 days. As a result, the Zacks Consensus
Estimate for the two periods remain pinned at 25 cents and 29
The lack of downward movement in estimates signals that the
first quarter might not be too different from the past quarters.
This is also indicated by that fact that the stock carries a
Zacks Rank #3 (Hold).
We caution against stocks with Zacks Ranks #4 and #5 (Sell
rated stocks) going into the earnings announcement, especially
when the company is seeing negative estimate revisions
Other Stocks to Consider
Our model states that a stock needs to have both a positive
Zacks Earnings ESP
and a Zacks Rank of #1, #2 or #3 to beat earnings estimates. You
could, however, consider the following stocks that satisfy both
) has a Zacks Rank #3 (Hold) and Zacks Earnings ESP of 0.78%.
) has a Zacks Rank #2 (Buy) and Zacks Earnings ESP of 0.76%.
) has a Zacks Rank #3 (Hold) and Zacks Earnings ESP of 2.7%.
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