Why Is Networking Company Ciena Stock Plunging Thursday?

Zinger Key Points
  • Ciena beats Q1 forecasts with $1.04B revenue; EPS at $0.66, stock dips.
  • Networking revenue down 5.6%; services up 12.6%. Adjusted margins grow.

Ciena Corp CIEN reported a first-quarter fiscal 2024 revenue decline of 1.8% year-on-year to $1.04 billion, beating the consensus estimate of $1.02 billion.

The American telecommunications networking equipment and software services supplier reported an adjusted EPS of $0.66, beating the consensus of $0.48. The stock price plunged after the results.

Segments: Total Networking Platforms revenue declined by 5.6% Y/Y to $807.2 million, and Total Global Services increased by 12.6% Y/Y to $126.8 million.

Margins: The adjusted gross margin expanded by 200 bps to 45.7%. Adjusted operating margin grew by 60 bps to 13.2%.

Two customers represented 10%-plus of revenue for the quarter, combining for a total of 26.5% of revenue.

Ciena held $1.48 billion in cash and equivalents and generated $266.1 million in operating cash flow.

CEO Gary Smith said, “While we remain very confident in the strength and durability of bandwidth demand as a long-term driver of our business, it is taking longer than expected for service providers to work through high levels of inventory.”

Investors can gain exposure to the stock via SPDR S&P Telecom ETF XTL and The Future Fund Active ETF FFND.

Outlook: Ciena expects fiscal 2024 revenue of $4 billion – $4.3 billion, down from previous expectations for 1%-4% growth (2024 revenue estimate $4.5 billion). For fiscal year 2023, Ciena reported revenue of $4.39 billion.

The company continues to expect its 2024 adjusted gross margin in the mid-40s%.

The company projects second-quarter revenue of $850 million – $930 million below the consensus of $1.1 billion. The company foresees adjusted gross margin in the low-40s% for the second quarter.

Price Action: CIEN shares were trading lower by 13.89% at $53.35 on the last check Thursday.

Market News and Data brought to you by Benzinga APIs
Actual EPS
EPS Surprise
Actual Rev
Rev Surprise
Posted In: EarningsEquitiesNewsGuidanceMoversGeneralBriefswhy it's moving
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!