Here's How Ciena's Placed Before Q2 Earnings Release

Ciena Corporation CIEN is scheduled to report second-quarter fiscal 2024 results on Jun 6.
The Zacks Consensus Estimate for earnings is pegged at 15 cents per share, implying a 79.7% decrease from the year-ago level.
For the fiscal second quarter, management expects revenues in the range of $850-$930 million.

Ciena Corporation Price and EPS Surprise

Ciena Corporation price-eps-surprise | Ciena Corporation Quote

The consensus estimate for revenues is pegged at $896.6 million, indicating a decline of 20.8% from the prior-year level.
CIEN has a trailing four-quarter earnings surprise of 21.3%, on average. Shares of Ciena have gained 1.4% in the past year compared with the sub-industry's growth of 1.1%.

Factors to Note

CIEN's performance in the fiscal second quarter is likely to have been affected by the slower-than-expected normalization of order volumes from the service providers. Macroeconomic concerns are likely to result in lower order volumes from service providers in certain international geographies, especially in Europe.
In addition, supply chain-driven key component shortages, extended lead times, large orders placed in response to market demands and customer inventory builds of networking equipment are likely to have hurt the company.
Inflation and higher expenses on product development amid stiff competition in the networking space might have further limited margin expansion in the quarter under review.
CIEN is one of the leading providers of optical networking equipment, software and services. The company's performance is likely to have been cushioned by the demand for bandwidth (especially driven by the proliferation by AI applications) and the resultant increase in traffic and the adoption of cloud architectures.
Apart from increasing demand for its solutions in the 5G, cloud, AI and automation space, CIEN is investing extensively to grab opportunities in fast-growing markets in the next-gen metro and edge solutions. CIEN's routing and switching solutions are likely to have witnessed strong uptake.
A strong momentum for WaveLogic 5 Extreme and 6500 RLS, which is being driven by cloud provider network expansions, is likely to have acted as a tailwind. In the fiscal first quarter, the company had added 11 new customers for WaveLogic 5 Extreme and eight new customers for RLS platform.
For the fiscal second quarter, we expect revenues from Total Networking Platforms which includes Optical Networking and Routing and Switching portfolios to be down 24% to $695.3 million.

What Our Model Says

Our proven model does not predict an earnings beat for CIEN. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here.
CIEN has an Earnings ESP of 0.00% and a Zacks Rank #4 (Sell).

Stocks to Consider

Here are some stocks that you may consider, as our model shows that these have the right combination of elements to beat on earnings this season.
Bath & Body Works, Inc BBWI has an Earnings ESP of +4.15% and currently carries a Zacks Rank #2.
BBWI is scheduled to report quarterly earnings on Jun 4. The Zacks Consensus Estimate for BBWI's to-be-reported quarter's earnings and revenues is pegged at 33 cents per share and $1.37 billion, respectively. Shares of BBWI have surged 30.5% in the past year.
Ollie's Bargain Outlet Holdings, Inc. OLLI is set to announce quarterly figures on Jun 5. The company has an Earnings ESP of +1.80% and a Zacks Rank of 3.
The Zacks Consensus Estimate for OLLI's to-be-reported quarter's earnings and revenues is pegged at 65 cents per share and $505.8 million, respectively. Shares of OLLI have risen 38.9% in the past year.
Broadcom, Inc. AVGO has an Earnings ESP of +3.66% and presently carries a Zacks Rank #3. AVGO is slated to release quarterly numbers on Jun 12.
The Zacks Consensus Estimate for AVGO's to-be-reported quarter's earnings and revenues is pegged at $10.79 per share and $12.04 billion, respectively. Shares of AVGO have risen 65.6% in the past year.
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