Ciena (CIEN) is up 10% at a seven month high after the company beat first quarter estimates and offered in-line second quarter guidance this morning.
The communications equipment maker reported first quarter revenue up 4% to $646 million versus $625-655 million guidance; adjusted gross margin was 42.6% versus low-to-mid-40% range guidance. Adjusted earnings fell to $0.15/share from $0.17 last year.
Last quarter, the company laid out its long-term growth strategy, calling for annual net revenue growth of 4-6%, adjusted earnings per share up 14-16% over the next three years and a long-term target of 15% adjusted operating margin. The company said it would be focused on profitability and taking market share given the opportunities within the current industry environment.
Management said the company was off to a strong start and making solid progress toward those goals. Ciena repeated that it has large number of significant deployments in early stages which have a lower gross margin.
The company guided second quarter revenue results in-line with low-to-mid-40% guidance but called for a mid-40% gross margin in the second half of fiscal 2018.
From the rapid proliferation and adoption of mobile applications, to cloud-based services, to over-the-top video streaming, network operators around the world are working to respond to the increased demand for capacity. Ciena is uniquely positioned to help them solve this challenge.
The stock has been consolidating in the $20-range for many years.