Earlier this month, networking and optical equipment provider Ciena
Ciena earned adjusted net income of $8.3 million, or $0.08 per share. Analysts had expected the company to post a loss of $0.08 per share. Indeed, the company surprised with its results and its shares jumped 20.2% on the announcement.
Into the numbers
Ciena reported revenues of $435.3 million, up 11.7% from a year ago. Net loss narrowed to -$31.5 million, from -$109.9 million last year. Ciena benefited from a better product mix. Its packet-optical transport segment contributed 61% of total revenue. However, other segments such as packet-optical switching and carrier Ethernet service delivery increased their contribution to sales from the previous quarter. This helped out Ciena's gross margin.
Ciena already has a bunch of prized, revenue-driving customers such as AT&T
Both Internet traffic and the demand for increased bandwidth are on the rise. This is positive for the company as it supplies 40G and 100G optical transport products. However, this environment is equally favorable for industry rivals such as Finisar
Let us not forget Cisco System's
The Foolish bottom line
Ciena has shown growth in numbers and efficiency in managing its costs. Also, the communication equipment industry looks bright due to future demand. However, industry giants are improving their offerings every day. To be profitable, Ciena has to innovate and stay ahead of rivals.
If you are interested in this up-and-coming industry, click below:
Fool contributor Navjot Kaur does not own any shares in the companies mentioned above. The Motley Fool owns shares of Infinera. The Fool owns shares of and has created a bull call spread position on Cisco Systems. Motley Fool newsletter services have recommended buying shares of Infinera, AT&T, and Cisco Systems. 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.