Ciena shrinks Q1 losses to $11.5M, but forecast remains a concern

Ciena is clearly on the right path to respond to its customers' migration to software-based networking environments, a trend that helped it narrow its losses to $11.5 million in its fiscal first quarter 2016 results, but its outlook is giving investors heartburn.

The vendor has forecast revenue to be between $615 million to $645 million, trailing analyst expectations of $643 million.

Ciena's losses were down from $1.8 million, or 17 cents, in the same period a year ago. After taking out certain items, the company's per-share earnings rose to cents from 12 cents.

For the fiscal first quarter of 2016, Ciena reported revenue of $573.1 million as compared to $529.2 million.

Gary Smith, CEO of Ciena, said the company benefited from an 8 percent adjusted operating margin in the fiscal first quarter, which was driven by "engagement with a more diverse set of customers."

"Despite some recent volatility in the broader macroeconomic environment, the demand drivers for our business remain firmly in place," Smith said.

Similar to rivals like Adva, Cisco and Nokia, Ciena is making a big bet on the service provider industry's movement to SDN and NFV. A sign of this came in May 2015 when the vendor purchased Cyan for about $400 million.

Shares of Ciena were trading at $16.81, down $3.90, or 18.83 percent, in Thursday morning trading on the Nasdaq stock exchange.

For more:
- see the earnings release
- WSJ has this article

Earnings summary: From Adtran to Zayo: Tracking wireline telecom earnings in Q4 2015

Related articles:
ADVA, Cisco, Ericsson, Nokia, others to tout solution-based approach to NFV, SDN at MWC
Optical transport equipment market dropped to $3.1B in Q3 2015, says research firm
Ciena's Q3 income jumps to $23.6M despite slowness at U.S. Tier 1 service provider customers
Ciena, Huawei, and ZTE take 10 percent share of WDM market in Q2, says research firm

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