What happened
Shares of Ciena (CIEN +2.38%) plunged by 30% last month, according to data provided by S&P Global Market Intelligence. Most of that decline occurred when Ciena reported fiscal third-quarter results in early September.
So what
Revenue in the fiscal third quarter crawled up 2% to $976.7 million, which resulted in adjusted earnings per share of $1.06. While those results topped consensus estimates, investors were disappointed by the optical networking tech company's guidance.
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The coronavirus pandemic has significantly impacted Ciena's core business, which resulted in a lackluster outlook for the fiscal fourth quarter. Ciena expects revenue in the quarter to be in the range of $800 million to $840 million, which is well below the $994.4 million in sales that analysts were modeling for.
Now what
Ciena warned that the coronavirus outbreak had made operating conditions "complicated" and it now takes more time to deploy and activate new equipment. The company is also struggling to ramp up international deals due to the pandemic, while visibility is suffering from deteriorating market conditions.
"As I alluded to in my opening remarks, late in the fiscal third quarter, we began to see some of the effects of COVID-19 manifest in our business to a greater degree than anticipated, as well as increased economic uncertainty," CEO Gary Smith said on the conference call with analysts. "Specifically, we began to experience a meaningful slowdown in orders and a softening of our outlook."
