A Preview Of Ciena's Earnings

On Thursday, June 03, Ciena CIEN will report its last quarter's earnings. Here is Benzinga's preview of the company's release.

Net Income, Earnings, And Earnings Per Share

Earnings and especially earnings per share (EPS) are useful measures of a company's profitability. Total earnings, which is also referred to as net income, equals total revenue minus total expenses. EPS equals to net income divided by the number of shares outstanding.

Earnings And Revenue

Based on management's projections, Ciena analysts model for earnings of $0.48 per share on sales of $829.27 million. In the same quarter last year, Ciena posted EPS of $0.76 on sales of $894.05 million.

What Are Analyst Estimates And Earnings Surprises, And Why Do They Matter?

Wall Street analysts who study this company will publish analyst estimates of revenue and EPS. The averages of all analyst EPS and revenue estimates are called the "consensus estimates"; these consensus estimates can have a significant effect on a company's performance during an earnings release. When a company posts earnings or revenue above or below a consensus estimate, it has posted an "earnings surprise", which can really move a stock depending on the difference between actual and estimated values.

If the company were to match the consensus estimate when it reports Thursday, EPS would have fallen 36.84%. Revenue would be down 7.25% from the same quarter last year. Here is how the company's EPS has stacked up against analyst estimates in the past:

Stock Performance

Shares of Ciena were trading at $53.5 as of June 01. Over the last 52-week period, shares are down 0.56%. Given that these returns are generally negative, long-term shareholders are probably upset going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. Ciena is scheduled to hold the call at 08:30:00 ET and can be accessed here.