Social Market Analytics Looks at Earnings for CIENA Corp.
This week, Social Market Analytics (SMA) looks at CIENA Corp. (NASDAQ: CIEN), a major manufacturer of equipment, software, and service solutions supporting voice, video, and data traffic on communications networks worldwide. The week of August 27 was a challenge for CIENA Corp. shareholders as the market reacted negatively to the company’s third quarter earnings report. On August 30, CIENA reported a third-quarter loss of $0.30 per share. On an adjusted basis, CIENA reported a net loss of $4.1 million or $0.04 per share, versus income of $8.3 million or $0.08 per share, last year, well below Wall Street analysts' consensus estimates of a loss of $0.02. Shares in CIENA plunged by about 20% as the company also released its dim FY2012 fourth quarter outlook below analysts' estimates. During the week, CIENA appeared on SMA’s morning Flash Report, which identifies stocks, in the pre-market, with extreme sentiment levels that are likely to trade with high activity during the upcoming session. In the pre-market of August 30, our analytics engine identified CIENA as a stock with high negative sentiment from the universe of stocks tracked by SMA. SMA’s sentiment metrics provided initial indication of negative price trends for CIENA as the market integrated the company’s disappointing financial performance.
On August 29, SMA’s S-Score for CIEN entered a sharp decline from Neutral into Extreme Negative levels. The behavior of SMA’s S-Score measures market trading sentiment and can provide actionable signals for upcoming price movement. CIENA’s change in S-Score accelerated in the pre-market of August 30 posting a large decrease to -3.78 (Extreme Negative), coincident with a 15-fold increase in its S-Volume metric indicating unusually high social media activity for the stock. CIEN gapped down strong at the open to $ 14.84, a decline of 11.2 percent, and continued to sell off during the session to close at $ 13.46, a loss of 19.5 percent for the day on high volume. In the pre-market of August 31, CIENA’s S-Score rebounded to Neutral levels. CIENA traded flat for the day closing up slightly at $ 13.67, but at a net loss of 18.6 percent for the week.
Social Media data are noisy and complex. A single metric is insufficient to understand sentiment behavior over time. Our S-Factors are a family of metrics, including volatility, trend and volume measures, designed to provide a complete view of the social media signature for each security tracked in SMA’s database. SMA's processing engine continuously updates our S-Factors, capturing overnight and pre-market sentimentactivities. Clients receive sentiment reports, prior to the U.S. market open, and intra-day sentiment estimatesfor tracked stocks, on-demand. We invite the reader to visit our website; investigate our market sentiment metrics for Priceline, other stocks, industry sectors, and market indices; participate in our FAQ forum; and sign up for our Flash Report and Newsletter.