Ciena stock slips after profit misses expectations as gross margin falls, while revenue tops forecasts
Shares of Ciena Corp.
CIEN,
slipped 0.3% in premarket trading Thursday, after the networking systems company reported fiscal fourth-quarter revenue that rose above expectations, but profit that came up shy as cost of goods growth outpaced the revenue increase. Net income rose to $103.5 million, or 66 cents a share, from $65.0 million, or 42 cents a share, in the year-ago period. Excluding nonrecurring items, adjusted earnings per share came to 85 cents, below the FactSet consensus of 86 cents. Sales rose 25.7% to $1.04 billion, above the FactSet consensus of $1.03 billion, as networking platforms revenue grew 30.5% to $828.8 million to beat expectations of $821.2 million. Meanwhile, total cost of goods sold increased 33.1% to knock gross margin down to 45.8% from 48.8%. Separately, the company set a new $1.0 billion stock repurchase program, and said it plans to enter into an accelerated share repurchase (ASR) deal under which it will buy back $250 million worth of shares. The stock has rallied 12.1% over the past three months through Wednesday, while the S&P 500
SPX,
has gained 4.6%.
