Network technology provider Ciena Corp. (NYSE: CIEN) reported a sharp increase in second-quarter revenues and earnings, aided by the diversification initiatives and growing customer base. The results also topped the Street view and the company’s stock surged early Thursday.
During the quarter, revenues moved up 18.5% year-over-year to $865 million and came in above Wall Street’s estimates. Networking platforms accounted for about 80% of the revenues, while two top customers represented about 25% of total sales.
Networking Platforms, Ciena’s main growth driver, recorded an 18% growth in revenues to $697 million. Software and Global Services revenues gained 23% and 21% respectively.
Adjusted earnings more than doubled year-over-year to $0.48 per share during the quarter and surpassed the market’s projection by a wide margin. Reported profit advanced to $52.7 million or $0.33 per share from $13.9 million or $0.09 per share last year.
Networking platforms accounted for about 80% of revenues, while two top customers represented a fourth of the total sales
Gary Smith, CEO of Ciena, said, “Today we reported very strong quarterly performance, including continued market share gains, driven by our technology leadership and diversified customer base in high growth markets. We are entering the second half with strong visibility and increased confidence for the full fiscal year supported by favorable industry dynamics and growing competitive advantage.”
Ciena repurchased about 1.2 million shares for an aggregate price of $45.4 million during the second quarter.
Related: Ciena Corporation Q1 2019 Earnings Conference Call Transcript
The management’s diversification program continues to yield results, with the broadening customer base and global expansion adding to revenue growth. The initiative is part of the efforts to reduce reliance on the legacy telecom companies and focus on emerging segments like network operation and data center business.
Network technology giant Cisco (CSCO) last month reported higher earnings and revenues for the third quarter, supported by a strong performance by its infrastructure platform, and issued positive guidance for the full year.
Shares of Ciena gained around 14% early Thursday following the earnings report. The stock, which hit a multi-year high earlier this year, gained 43% in the past twelve months.