Shares of optical network communication equipment vendor Ciena Corp. (NYSE:CIEN) jumped on Thursday following a mixed fourth-quarter report. Guidance calling for substantial revenue growth during the first quarter, along with positive commentary from management, seems to be the driver behind the stock's rise. At 11:45 a.m. EST, the stock was up about 14.5%.
Ciena reported fourth-quarter revenue of $716.2 million, up 3.5% year over year and in line with analyst expectations. The networking platforms segment produced $488 million of revenue, up slightly from $484.3 million during the prior-year period, while the packet networking segment grew revenue by 13.7% to $72.4 million. Optical transport saw revenue tumble 65% to just $5.8 million, while the software and services segments grew revenue by 43% and 11%, respectively.
Non-GAAP earnings per share came in at $0.44, up from $0.42 during the prior-year period but $0.02 below the average analyst estimate. GAAP EPS was $0.25, up from $0.10. Non-GAAP gross margin rose by 30 basis points year over year to 45.2%, while non-GAAP operating margin slumped 20 basis points to 12.8%. Non-GAAP operating expenses jumped 5.4%, knocking down profitability.
Ciena expects to report solid revenue growth during the first quarter. The company guided for first-quarter revenue in the range of $615 million to $645 million, up from $573 million during the prior-year period. The midpoint of that range represents growth of 9.9%.
Ciena CEO Gary Smith expects market share gains and improved profitability in 2017:
Our strong fiscal 2016 results demonstrate our increasingly differentiated performance versus our competitors, marking Ciena's seventh consecutive year of growing faster than the overall market as well as steady improvement in our operating leverage, profitability and cash flow. We believe that the combination of our leading technology, strategic investments, global scale and business diversification will enable us to continue to take market share and drive operating leverage in fiscal 2017.
While Ciena's fourth-quarter results were mixed, a positive outlook was enough to send shares higher on Thursday.
Timothy Green has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.