Ciena Corporation CIEN is scheduled to report fourth-quarter fiscal 2024 results on Dec. 12.

Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar. 

The Zacks Consensus Estimate for earnings is pegged at 66 cents per share, implying a 12% decrease from the year-ago level.

The consensus estimate for revenues is pegged at $1.1 billion, indicating a decline of 2.1% from the prior-year level. For the fiscal fourth quarter, management expects revenues in the range of $1.06- $1.14 billion.

CIEN delivered a trailing four-quarter earnings surprise of 41.3%, on average. Shares of Ciena have gained 63.7% in the past year compared with the sub-industry's growth of 62.9%.

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Factors to Note Ahead of CIEN’s Q4 Release

CIEN is one of the leading providers of optical networking equipment, software and services. The company’s performance is likely to have been cushioned by the demand for bandwidth (especially driven by the proliferation of AI applications), the increase in traffic and the adoption of cloud architectures.

Momentum with cloud providers, particularly within terrestrial, submarine and coherent pluggable applications, bodes well as this indicates a narrowing gap between supply and inventory absorption. Cloud providers have been investing in network architectures (subsea cables, long-haul routes and data center connectivity) to support the growth in cloud and AI-driven traffic. The strong uptake of the Blue Planet software is another key catalyst. We expect revenues from Blue Planet Automation Software and Services to be $21.9 million in the fiscal fourth quarter, up 9.2% year over year. 

Apart from increasing demand for its solutions in the 5G, cloud, AI and automation space, CIEN has been investing extensively to grab opportunities in fast-growing markets in the next-gen metro and edge solutions. CIEN’s routing and switching solutions are likely to have witnessed strong uptake.

Ciena Corporation Price and EPS Surprise

Ciena Corporation price-eps-surprise | Ciena Corporation Quote

The company expects the adoption of WaveLogic 6 Extreme to boost sales in the fiscal fourth quarter as it begins shipping along with continued momentum in WaveLogic 5. Also, CIEN expects the Reconfigurable Line System platform (“RLS”) revenues to improve as cloud providers increasingly deploy RLS for their AI-optimized network architectures.

Slower-than-expected recovery of order volumes from international service providers remains as headwinds. Ongoing macroeconomic and geopolitical tension in Europe has been forcing service providers to exercise a muted spending approach in the region.

Inflation and higher expenses on product development amid stiff competition in the networking space are expected to have further limited margin expansion in the quarter under review.

For the fiscal fourth quarter, revenues from Networking Platforms are expected to be down 5.5% year over year. We expect revenues from Global Services to be up 7.5% year over year.

What Our Model Says About CIEN

Our proven model does not conclusively predict an earnings beat for CIEN in this earnings season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here.

CIEN has an Earnings ESP of 0.00% and a Zacks Rank #3 at present. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are some stocks that you may consider, as our model shows that these have the right combination of elements to beat on earnings this season.

RPM International Inc. RPM is set to announce quarterly figures on Jan. 7. RPM currently has an Earnings ESP of +0.67% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for RPM’s to-be-reported quarter’s earnings and revenues is pegged at $1.35 per share and $1.78 billion, respectively. Shares of RPM have risen 27.1% in the past year.

Accenture ACN presently has an Earnings ESP of +2.13% and a Zacks Rank #3. ACN is slated to release quarterly numbers on Dec. 19. The Zacks Consensus Estimate for ACN’s to-be-reported quarter’s earnings and revenues is pegged at $3.38 per share and $17.2 billion, respectively. Shares of ACN have gained 5.9% in the past year.

Paychex Inc PAYX currently has an Earnings ESP of +0.53% and a Zacks Rank #3. PAYX is scheduled to report quarterly earnings on Dec. 19. The Zacks Consensus Estimate for PAYX’s to-be-reported quarter’s earnings and revenues is pegged at $1.12 per share and $1.31 billion, respectively. Shares of PAYX have surged 14.1% in the past year.

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