Ciena (CIEN -8%) guided during its investor day for its FY14 (ends Oct. '14) op. margin to be at the low end of the company's 7%-10% target range.
Citi (Neutral) thinks the forecast suggests ~10% op. margins are still a ways off. "While we have become believers in the sustainability of Ciena’s product cycle, op margin expansion seems to still be coming in fits and starts challenging the earnings power of the company and making it difficult to currently argue for more than a 20x P/E on our CY14 $1.24 est."
William Blair (Outperform) notes the forecast implies a fiscal 1H op. margin of 5%, but also a fiscal 2H margin near 10%. The firm is slightly upping its FY14 and FY15 EPS estimates.
Ciena also guided for FY14 opex to total $820M, up just slightly from an FY13 level of $810M (exc. restructuring/amortization costs). Revenue growth is expected to exceed mid-to-high single digit market growth; Ciena's rev. growth consensus already stands at 10.4%.