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Why Ciena (CIEN) Stock Is Jumping Thursday

Stocks in this article: CIEN

NEW YORK (TheStreet) -- Ciena (CIEN) was gaining 16.9% to $22.20 in pre-market trading Thursday after beating analysts' estimates for earnings and revenue in the fiscal second quarter.

For the second quarter Ciena reported EPS or 17 cents a share, beating the Capital IQ Consensus Estimate of 13 cents a share by 4 cents. Revenue grew 10.3% from the year-ago quarter to $560 million. Analysts expected revenue of $559 million for the quarter.

Looking forward to the third quarter Ciena expects revenue of $585 million to $615 million, compared to analysts' estimates of $583.3 million for the quarter.

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TheStreet Ratings team rates CIENA CORP as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:

"We rate CIENA CORP (CIEN) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and impressive record of earnings per share growth. However, as a counter to these strengths, we find that the company's profit margins have been poor overall."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 2.5%. Since the same quarter one year prior, revenues rose by 17.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • Net operating cash flow has increased to -$37.16 million or 18.73% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -10.84%.
  • 45.29% is the gross profit margin for CIENA CORP which we consider to be strong. Regardless of CIEN's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, CIEN's net profit margin of -2.98% significantly underperformed when compared to the industry average.
  • You can view the full analysis from the report here: CIEN Ratings Report

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Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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