Personal Finance

Why Shares of Ciena Corp. Surged Today

The outside of Ciena headquarters.

What happened

Shares of Ciena Corp. (NYSE: CIEN) jumped on Tuesday following a solid fiscal first-quarter report from the network technology company. Ciena beat analyst estimates for both revenue and earnings, and its second-quarter guidance matched expectations. The stock was up about 9.5% at 10:50 a.m. EST.

So what

Ciena reported first-quarter revenue of $646.1 million, up 4% year over year and about $4.2 million higher than the average analyst estimate. Revenue from networking platforms grew 1.2% to $496.0 million; software and software-related services revenue jumped 36.1% to $53.5 million; and global services revenue rose 4.8% to $96.6 million. Total revenue was in line with the company's guidance .

The outside of Ciena headquarters.

Image source: Ciena Corp.

Non-GAAP earnings per share came in at $0.15, down from $0.17 in the prior-year period but $0.02 better than analysts were expecting. The company lost $3.29 per share on a GAAP basis due to a $476.9 million charge related to the Tax Cuts and Jobs Act.

"We demonstrated a strong start toward achieving our long-term financial goals with our fiscal first quarter results, including year-over-year top-line growth, continued cash generation and a strengthening balance sheet. We also are confident in our ability to continue driving market share gains across key geographies and customer segments by intersecting the industry's demand drivers with leading innovation," said CEO Gary Smith.

Now what

Ciena expects to produce between $710 million and $740 million of revenue during the second quarter, a range that straddles the average analyst estimate of $720.8 million. Gross margin is expected to be in the low-to-mid 40% range, compared to 42.1% during the first quarter.

CIEN data by YCharts .

Shares of Ciena have been on a roller-coaster ride over the past five years, fluctuating up and down without a clear direction. A strong quarterly report wasn't quite enough to propel the stock to a new five-year high, but it's now up about 31% since bottoming out late last year.

10 stocks we like better than Ciena

When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor , has tripled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Ciena wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of March 5, 2018

Timothy Green has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

CIEN

Other Topics

Stocks

The Motley Fool

Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

Learn More