Earnings: Ciena Corp. stock gains as Q3 results beat estimates

Network technology provider Ciena Corp. (NYSE: CIEN) reported a marked increase in third-quarter revenues and earnings, aided by the steady expansion of its customer base. The results also topped the Street view and the company’s stock gained sharply early Thursday.

During the quarter, revenues moved up 17.3% year-over-year to $960.6 million and came in above Wall Street’s estimates. Networking platforms accounted for about 83% of the total revenues.

Adjusted earnings rose year-over-year to $0.71 per share from $0.48 per share last year and surpassed the market’s projection. Reported profit advanced to $86.7 million or $0.55 per share from $50.8 million or $0.34 per share in the third quarter of 2018.

Related: Cisco Q4 profit beats Street view

Revenues of Networking Platforms, Ciena’s core business segment, moved up 17.5% to $796 million in the third quarter, while Software and Software-Related Services recorded a 16% growth to $47.8 million. There was a 17% growth in Global Services revenues to $116.7 million. Geographically, all regions except the Asia Pacific registered growth.

Gary Smith, CEO of Ciena, said, “We delivered another quarter of outstanding financial results as we benefit from our strong competitive position within the industry and continue to gain market share. Looking ahead, fiscal 2019 will be an extraordinary year for Ciena, including substantial revenue growth and increased profitability.”

During the three-month period, the management repurchased around 1.1 million shares for $45.4 million.

Also see: Ciena Q2 2019 Earnings Conference Call Transcript

The positive outcome reflects the management’s diversification initiatives with a focus on global expansion. Of late, there has been a shift in Ciena’s business strategy so as to reduce reliance on the legacy telecom sector and focus more on emerging areas like the data-center business.

The company’s stock gained about 8% early Thursday immediately after the earnings announcement, after closing the previous session higher.

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