Ciena on Thursday reported fiscal first-quarter profit and revenue that topped consensus estimates. Revenue guidance for Ciena stock came in below expectations.
For the quarter ending Jan. 31, Ciena earnings rose 3% to 66 cents a share on an adjusted basis. Revenue fell nearly 2% to $1.04 billion.
A year earlier, the Hannover, Md.-based maker of optical communications gear, earned 64 cents a share on sales of $1.057 billion. Analysts expected Ciena earnings of 48 cents on sales of $1.02 billion.
Ciena's fiber optics gear is built into telecom networks and hyperscale data centers operated by internet giants. Telecom customers have been ordering less network gear.
"Cloud customers have proven to remain favorable, but Ciena has not overcome its dependence on telecoms, particularly those in North America," said Raymond James analyst Simon Leopold in a report.
At Barclays, analyst Tim Long said in a report: " Although we expect telecom to turnaround at some point, the timing and degree of the recovery will continue to pressure results through 2024."
Ciena Stock: Guidance Misses
For fiscal Q2, Ciena forecast revenue of $890 million at the mid-point of guidance, missing estimates of $1.097 billion.
On the stock market today, Ciena stock fell 14.7% to close at 52.84.
Short interest had climbed ahead of the Ciena earnings report. Short sellers borrow shares and sell them in the expectation of a price drop, after which they buy them back at a lower price, return them to the lender, and pocket the difference.
Shares had climbed 36% in 2024 prior to the Ciena earnings report.
Heading into the Ciena earnings report, the company owned a Relative Strength Rating of 90 out of a best-possible 99, according to IBD Stock Checkup.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
