Shares of Ciena (CIEN -10.76%) traded 17.4% higher as of 1:20 p.m. EST, thanks to a mixed fourth-quarter earnings report. The maker of high-speed networking systems and related services also presented a rosy view of its long-term growth prospects.
In the fourth quarter of fiscal-year 2019, Ciena saw revenues rise 7.6% year over year to $968 million. Adjusted earnings increased by 9.4%, landing at $0.58 per diluted share. Your average analyst had been expecting earnings near $0.63 per share on sales in the neighborhood of $964 million, so Ciena beat the consensus revenue target while falling short of bottom-line estimates.
On the earnings call, CFO Jim Moylan said that Ciena continues to target year-over-year earnings growth of roughly 20% per year over the next three years. Revenues are expected to rise at an annual clip of approximately 7% over the same period.
Management also painted a rosy picture of Ciena's position in the networking market, saving the brightest colors for the data center interconnect (DCI) sector.
"Our diversification and global scale have created a balanced and resilient business, and one that has consistently outperformed the market and our peers, even in the face of short-term challenges in any particular geography, segment or customer," said CEO Gary Smith. "Regarding our web-scale customers, we are now clearly an established incumbent in several key accounts and we broadened those relationships considerably in 2019. This led to a greater than 50% market share in the global DCI market."
It's no surprise to see investors shrug off Ciena's unimpressive earnings result to focus on strong revenue growth and a healthy future.