Ciena Q4 Earnings: Profit Misses Expectations, Margins Decline, Names New Chair
Ciena Corp (NYSE:CIEN) reported a fiscal fourth-quarter 2024 revenue decline of 0.5% year-on-year to $1.124 billion, beating the analyst consensus estimate of $1.104 billion.
The American telecommunications networking equipment and software services supplier reported adjusted EPS of $0.54, missing the analyst consensus estimate of $0.66. The stock fell after the print, but it recouped losses and traded higher in the premarket session.
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Segments: Total Networking Platforms revenue declined by 2.0% Y/Y to $859.0 million, and Total Global Services decreased by 5.6% Y/Y to $142.0 million.
Margins: The adjusted gross margin declined by 210 bps to 41.6%, and the adjusted operating margin decreased by 380 bps to 10.0%. Two 10%-plus customers represented a total of 31.2% of revenue.
Ciena held $1.33 billion in cash and equivalents and generated $349.3 million in operating cash flow.
The company bought back approximately 2.1 million shares of common stock for an aggregate price of $132.0 million during the quarter.
Chair Transition: Ciena named Lawton W. Fitt as independent Chair of Ciena’s Board, effective December 11, 2024, taking over from Patrick H. Nettles, Ph.D., who retired. Nettles will continue as a director to ensure a seamless transition.
CEO Gary Smith noted that the quarterly revenue and strong order flow reflect the company’s significant increasing technology leadership and positive industry dynamics. As Cloud and AI drive bandwidth demand across the network, Smith noted that Ciena is positioned for accelerated revenue growth and market share expansion.
Ciena stock surged over 62% year-to-date. At least 4 Wall Street firms, including Stifel, Citigroup, Rosenblatt, and Needham, raised their price targets on the stock in December 2024. Three of them have a Buy rating on the stock.
Price Action: CIEN stock is up 8.13% at $79.16 premarket at the last check Thursday.
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