Why Ciena (CIEN) Missed Revenue Plunging Shares

NEW YORK (TheStreet) -- Ciena (CIEN) reported adjusted earnings of 16 cents for its fourth-quarter earnings report, missing the Capital IQ Consensus of 24 cents by $0.08. Shares were losing 7.8% to $21.11.

Ciena reported revenues of $583.4 million, a 25% percent increase year-over-year and higher than the $568.51 million consensus. Ciena's guidance for the first quarter calls for revenue $515 million and $545 million compared to the Capital IQ Consensus of $537.66 million. The guidance also includes adjusted (non-GAAP) gross margin percentage in the low-40s and adjusted (non-GAAP) operating expenses of about $205 million.

Despite the missed earnings and conservative guidance, Jim Cramer and Stephanie Link bought 2,000 more shares of the company for Jim's charitable trust portfolio telling their Action Alerts PLUS subscribers: "We like the long-term story of CIEN, its market share growth in optical and its new products and strong trends in the upgrade cycle from the service providers and cable companies."

"We see the reaction as overdone, especially on a blowout revenue number and record backlog," Cramer and Link write. "Fiscal 4Q earnings missed consensus by 8 cents a share and came in at 16 cents a share. Revenues rose 8.4% q/q and 25.3% y/y and easily beat consensus at $583.4 million."

"This performance validates the strategic market differentiation we've established with our OPn architecture, our unique approach to customer engagement, and our continued technology innovation," the company's press release states. "These differentiators will help us continue to grow revenue and increase operating leverage in 2014."

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