Ciena Stock Rallies After Earnings Top Estimates

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The optical networking hardware company is seeing strong demand from cloud providers.

Ciena shares were gaining ground Thursday after the optical networking firm posted better-than-expected financial results, driven by growing demand for the company’s hardware from cloud computing providers.

For its fiscal third quarter ended July 29, Ciena reported revenue of $1.07 billion, up 23% from the year-ago quarter, toward the top of the company’s guidance range of $1 billion to $1.08 billion and above consensus at $1.04 billion. Adjusted profit was 59 cents a share, ahead of the consensus forecast at 51 cents. Under generally accepted accounting principles, or GAAP, the company earned 20 cents a share. Adjusted gross margin was 42.7%, up from 40% in the year earlier period.In premarket trading Thursday, Ciena shares were 5.3% higher to $45.45.

Ciena, which historically has been primarily a provider to telecommunications companies, has been growing its business with cloud providers. Non-telco customers were a record high 46% of revenue in the quarter, the company said in a presentation to investors. “We delivered excellent results for the fiscal third quarter with strength across all regions,” Ciena CEO Gary Smith said. “We are encouraged by increased customer activity that, when combined with our elevated backlog, market leadership and expanding addressable market, we believe will drive growth and market share gains going forward.”

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