Ciena (NASDAQ:CIEN) beat the Street on Wednesday as the network gear maker enjoyed solidly stronger gross margins and a healthy increase in product sales.
In addition to the upbeat results, Ciena unveiled a bullish guidance for the current quarter, helping to drive its shares 8% higher in premarket trading.
The gear maker said it lost $1.2 million, or a penny a share, last quarter, compared with a loss of $29.8 million, or 30 cents a share, a year earlier.
Excluding one-time items, Ciena said it earned 23 cents a share, easily besting forecasts from analysts for 16 cents.
Revenue rose 14% to $538.4 million, topping the Street’s view of $533.5 million. Gross margins expanded to 42.4% from 38.2%.
Ciena’s converged packet optical sales surged 56.1% to $302 million last quarter, while software and services revenue jumped 20.2% to $108.6 million. The company’s packet networking revenue increased 11.4% to $61.6 million and optical transport sales rose 12.3% to $66.2 million.
"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,” CEO Gary Smith said in a statement.
Looking ahead, Ciena forecasted fourth-quarter revenue of $550 million to $580 million, which compares favorably with consensus calls from analysts for $551.4 million. Non-GAAP gross margins are expected to remain in the low 40s percent range.
"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,” Smith said.
Wall Street cheered the results and outlook, bidding shares of Hanover, Md.-based Ciena 7.83% higher to $22.30 ahead of Wednesday’s opening bell. The shares have already soared 32% on the year and 50% over the past 12 months.