Ciena (CIEN) To Report Q2 Earnings: What's In The Cards?
Zacks Investment Research | May 30, 2016 09:00PM ET
Ciena Corporation (NYSE:CIEN) is set to report second-quarter fiscal 2016 results on Jun 2. Last quarter, the company delivered a postive earnings surprise of 33.33%. The company delivered positive earnings surprises in three out of the last four fiscal quarters, bringing the average to a positive earnings surprise of 24.47%. Let’s see how things are shaping up for this announcement.
Factors to Consider
Ciena continues to benefit from strong demand for packet-optical transport and switching products, integrated network, and service management software. Higher spending on optical upgrade and a higher number of orders from international customers will likely boost its top line. Additionally, growing demand for cloud-based on-demand networking capabilities is also likely to bode well. Mobile bandwidth consumption is expected to rise phenomenally, thereby providing more growth opportunities to the company.
Currently, the company is one of the leading suppliers of 40G and 100G optical transport technology. In addition, the company is making efforts to expand its Web Scale IT Architecture in the enterprise market by launching products like new chipsets, metro architecture and mobile backhaul solutions. We believe that Ciena’s strong product portfolio will boost its top line over the long run.
In spite of all these encouraging factors, Ciena’s profitability can be affected by its leveraged balance sheet. Moreover, stiff competition from the company’s peers like Cisco (NASDAQ:CSCO) and Juniper Networks (NYSE:JNPR) among others remains a concern. Uncertain macroeconomic environment and strengthening U.S dollar are added concerns.
Ciena expects second-quarter fiscal 2016 revenues in the range of $615 million to $645 million.
Earnings Whispers
Our proven model does not conclusively show that Ciena will beat earnings estimates this quarter. This is because a stock needs to have both a positive Original post
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