Ciena Corporation (CIEN) reported a 95% plunge in earnings for the fourth quarter due to a decline in income tax benefit. However, the results exceeded analysts’ expectations. The top line increased 21% helped by the continued execution of its proven strategy. Following this, the stock inched up over 6% in the premarket session.
Net income plunged 94.5% to $64.98 million and earnings dipped 95% to $0.34 per share. Adjusted earnings soared 66% to $0.53 per share.
Revenue grew 20.8% to $899.4 million, driven by growths across all of its segments. The top line was benefited by the three 10%-plus customers that represented a total of 33.1% of revenue.
Segment-wise, revenue from total networking platforms increased 19% helped by a jump in converged packet optical revenue. Revenue from software and software-related services jumped 61% on an increase in platform software and services revenue and higher blue planet automation software and services revenue. Total global services revenue grew 15%.
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The results were impacted by several mega trends including cloud, mobility and 5G, fiber densification, data center, and IoT & connected objects. This is driven by an increased need for greater bandwidth and adaptive automation.
Looking ahead into the long term, the company said its strategy execution will drive top-line growth, profitability and cash generation. The company expects revenue to be about 6% to 8% annual growth over the next three years and adjusted EPS to be over 20% annual growth per year over the next three years. Free cash flow is predicted to be about 60% to 70% of adjusted operating income in each of the next three years.
Shares of Ciena ended Wednesday’s regular session up 1.74% at $32.14 on the NYSE. The stock has risen over 53% in the year so far and over 48% in the past year.