Can Higher Networking Revenues Aid Ciena (CIEN) Q2 Earnings?
Zacks Investment Research | May 28, 2018 08:55AM ET
Ciena Corporation (NYSE:CIEN) is scheduled to report second-quarter fiscal 2018 financial results (ending Apr 28, 2018) before the opening bell on May 31. The company is likely to report higher consolidated revenues led by healthy growth dynamics.
Whether this could result into an earnings beat remains to be seen.
Factors to Consider
During the quarter, Ciena’s GeoMesh solution was selected by Sweden-based Eastern Light to help meet the region’s fast-growing demand for long-haul dark fiber. The company also unveiled 5G network solutions to help operators expand their 4G networks and prepare for 5G.
Ciena’s 6500 packet-optical platform was deployed by U.K.-based Jisc to provide Janet Network, the first National Research and Education Network, with high-capacity 400G wavelength connectivity.
In the fiscal second quarter, the company added an important aggregation, scale and programmability capability. The company’s new 8180 and 6500 Reconfigurable Line System platforms helped to tackle network complexity by combining massive bandwidth scalability and aggregation with integrated intelligence and programmability to improve end-user experience.
Furthermore, in the quarter, Ciena introduced an enhanced policy capability into its Blue Planet intelligent automation platform that incorporates the architectural framework from the Linux Foundation’s open-source Open Networking Automation Platform to aid network providers’ evolution to more adaptive, software-centric networks.
The Zacks Consensus Estimate for total revenues for the Networking Platforms segment, which accounts for the lion’s share of total revenues, is currently pegged at $574 million, up from $572 million reported in second-quarter fiscal 2017. Revenues from Global Network Service segment are expected to be $103 million compared with $98 million reported in the prior-year quarter. Revenues from Software and Services are estimated to be $49.7 million compared with $37.7 million reported in the year-ago quarter. Consequently, Ciena’s consolidated revenues for the quarter are likely to be $730 million, up from $707 million reported in the year-earlier quarter.
What Our Model Says
Our proven model does not conclusively show that Ciena is likely to beat earnings this quarter as it does not possess one of the two key components. A stock needs to have both a positive Zacks Investment Research
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