Many network equipment manufacturers today are facing a challenging market in light of the move from hardware- to software-based solutions and services. However, optical networking is one bright spot on the NEM frontier. And Ciena is one example of a company in this space that’s seen strong performance despite the disruptive forces in networking today.
Companies like Ciena are benefitting from enormous deals that telcos and other service providers have recently awarded. For example Ciena last year was named a lead vendor for Verizon’s (News - Alert) 100Gbps metropolitan network update effort.
Ron Kline of Ovum in a March 2015 blog just after the announcement was made public commented that the Verizon network “will be the first large-scale deployment of flexible-grid colorless, directionless, and contentionless ROADMs.”
As a recent story by Investor’s Business Daily notes, other North American carriers, and internet companies including Facebook and Microsoft (News - Alert), are also staging major fiber optic network upgrades, boosting the earnings of Ciena as well as fiber optics components companies including Acacia, Lumentum, and Oclaro. Ciena, which has outperformed ratings from investment bank William Blair, sits in the No. 2 spot in terms of market cap in IBD’s Telecom Fiber-Optics ranking, according to the piece.
Ciena’s stock today is trading at 22.34 a share. A week ago Ciena announced that its unaudited financial results for the fiscal third quarter ended July 31, 2016, included revenue of $670.6 million. That was up from the $602.9 million it reported in the fiscal third quarter of 2015.
“We posted strong results on all financial operating metrics in our fiscal third quarter, continuing a trend of consistently improving financial performance and demonstrating the value of having a diversified business to manage through market dynamics,” said Gary B. Smith, president and CEO, Ciena. “Through strategic investments to broaden our portfolio, market application and customer and geographic base, we have positioned Ciena to deliver sustainable long-term growth and increased profitability.”
Edited by Maurice Nagle