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What: Shares of Ciena (NYSE:CIEN) rose by more than 13% Wednesday after the optical telecom equipment specialist reported fiscal third quarter 2013 earnings results.
So what: Revenue for the quarter came in at $538.4 million, which translated to an adjusted net income of $26.2 million, or $0.23 per share. That's a massive improvement over last year's adjusted net loss of $4.1 million, or negative $0.04 per share in the third quarter of 2012. For reference, analysts on average were expecting Ciena to turn in adjusted net earnings of just $0.16 per share on sales of $533.51 million.
Now what: Ciena president and CEO Gary Smith stated, "Differentiated by our specialist strategy, we have increased our market share, achieved steady growth, and delivered improved and more consistent financial performance over the last several quarters. We believe that by expanding our role in the industry and extending our reach within our markets, we will be positioned to deliver greater profitability that is more sustainable over time."
This marks the third quarter in a row Ciena has turned in positive net earnings on an adjusted basis, lending credence to long-term investors' hopes that the company's stubborn march toward sustainable profitability is for real. Shares currently look a little rich trading at 23.9 times next year's earnings, but they could still prove a bargain down the road if this momentum continues as large customers like AT&T and Verizon continue to build out their IT infrastructures.
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