Ciena: An Always-Volatile Play On Telecom And Data Center Spending
Stephen Simpson, CFA
Stephen Simpson, CFA
Ever-Volatile Ciena Doing Well In 100G
Stephen Simpson, CFA
Stephen Simpson, CFA
Feb. 6, 2015, 1:53 PM
- Cyan (NYSE:CYNI) has gradually soared today on volume of 169K shares (above a 3-month daily average of 126K).
- No news has hit the wires to explain the move. The packet-optical hardware/SDN software vendor also rose sharply on Tuesday, and is a month removed from hiking its Q4 guidance. Full Q4 results arrive on Feb. 18.
Feb. 3, 2015, 1:25 PM
- Though the Nasdaq is only up 0.4%, a long list of tech firms are posting outsized gains today.
- It's a good day for online real estate: Merger partners Zillow (Z +5%) and Trulia (TRLA +4.9%) are up sharply, as are Chinese online real estate plays SouFun (SFUN +5.2%), E-House (EJ +6.5%), and Leju (LEJU +3.8%).
- Other major tech gainers include security software firm Imperva (IMPV +4.7%), gaming headset maker Turtle Beach (HEAR +6.6%), salvage auction site Liquidity Holdings (LQDT +7.4%), RF filter tech developer Resonant (RESN +10.7%), telecom equipment/SDN software vendor Cyan (CYNI +10.1%), Chinese CDN owner ChinaCache (CCIH +10.8%), application delivery controller vendor A10 Networks (ATEN +6.1%), Chinese sports lottery site 500.com (WBAI +7.6%), and unified communications hardware/software firm ShoreTel (SHOR +6.7%).
- Earlier: Solar stocks soar as oil tops $51, CSIQ strikes deal
- Earlier: 3D printing stocks routed after Stratasys warns
Jan. 30, 2015, 2:56 PM
- Optical networking/carrier Ethernet hardware vendor Ciena (CIEN -4%), optical component suppliers Finisar (FNSR -2.4%) and Oclaro (OCLR -2%), and telecom chipmakers AppliedMicro (AMCC -5.9%) and Cavium (CAVM -4.4%) are all off after component vendor JDS Uniphase (JDSU -7.4%) missed FQ2 estimates and provided soft FQ3 guidance.
- On its CC (transcript), JDS observed its FQ2 network enablement (test equipment) and service enablement (telecom software/services) revenue fell a combined 8% Y/Y due to "weaker carrier spending and no budget flush in historically stronger December quarter." Network enablement is expected to remain soft in seasonally weak FQ3 as customers weigh their 2015 spending plans. Service enablement is expected to grow ~24%, after growing 16.6% in FQ2.
- AppliedMicro is down 10% since providing a soft FQ4 EPS guidance (-$0.09 vs. a -$0.07 pre-earnings consensus) on Tuesday afternoon to go with an FQ3 beat. Cavium is giving back the gains it saw yesterday after beating Q4 estimates and providing strong Q1 guidance.
Jan. 23, 2015, 10:32 AM
- Infinera (INFN +17.7%) knocked the cover off the ball yesterday afternoon, soundly beating Q4 estimates and issuing strong Q1 guidance on the back of growing demand for its DTN-X optical transmission/switching platform for 100G deployments.
- Rival Ciena (CIEN +3.7%) and optical component vendors JDS Uniphase (JDSU +2.7%) and Finisar (FNSR +2.3%) are rallying in response. The companies followed equity markets higher yesterday after Verizon guided for its 2015 capex to be slightly above 2014 levels (contrasts with AT&T's planed capex cut).
- On its CC (transcript), Infinera said it added 10 new invoiced DTN-X customers in Q4 (3 new to Infinera altogether), raising its total to 59, and that nearly half of all DTN-X clients are now opting for the company's Instant Bandwidth rapid provisioning tech. Initial revenue for the Cloud Xpress point-to-point interconnect platform was received in December, and 8 customer commitments have been received to date.
Jan. 7, 2015, 12:45 PM
Jan. 7, 2015, 9:58 AM
- Cyan (NYSE:CYNI) now expects Q4 revenue of $30M-$31M, well above prior guidance of $24M-$26M and a $25.1M consensus.
- The hike is attributed to "strong demand for [Cyan's] Z-Series packet-optical hardware," which provides integrated optical transmission, switching, and Ethernet functionality, for both "metro and regional 100G and packet applications." Cyan also reiterates its expectation to "convert some of [its] SDN and NFV trials into wins" in 1H15.
- The company was hit hard in 2013/2014 by soft orders from top customer Windstream, as well as a broader slowdown in North American wireline capex.
- Full Q4 results are due on Feb. 18. Deep packet inspection hardware vendor Procera has also hiked its guidance this morning.
Dec. 24, 2014, 2:40 PM
Dec. 23, 2014, 1:13 PM
- Cowen's Paul Silverstein believes Verizon will likely select Ciena (CIEN +1.9%) to be a supplier for its upcoming 100G metro optical buildout.
- Though 100G is increasingly a part of long-haul network upgrades, metro investments are still in their early stages. Verizon stated earlier this year Fujitsu and Tellabs would be among its 100G metro suppliers.
- Soft demand from North American carriers has been taking a toll on Ciena and many others. Verizon announced last week it has used Ciena's WaveLogic photonic systems to provision its first 200G ultra-long-haul link.
- Update: Silverstein thinks Ciena will be "one of the two key suppliers" for Verizon's buildout, and that a deal could be worth $200M-$300M over two years. "To be clear, our checks indicate that Verizon has not selected vendors for this 100Gbps metro optical build-out. That said, our checks also indicate that Ciena currently is well in front of the pack..."
Dec. 11, 2014, 9:25 AM
- Though Ciena (NYSE:CIEN) missed FQ4 EPS estimates (while slightly beating on revenue) and offered FQ1 EPS guidance ($540M-$570M) that was below a $566.6M consensus at the midpoint, it guided on its CC for 7%-9% FY15 (ends Oct. '15) revenue growth; consensus is at 7.1%.
- Also: Gross margin is expected to rebound to the low-40s range in FQ1 after falling 640 bps Q/Q and 290 bps Y/Y in FQ4 to 37.9%. Longer-term, Ciena expects GM to return to the low-to-mid 40s range.
- Helping Ciena's cause today: Shares were down 29% YTD going into earnings, thanks to worries about weak telecom capex and the margin pressure caused by "up-front incentives" provided to AT&T for its huge Domain 2.0 initiative.
- Ciena has been trying to lower its dependence on AT&T and other major telcos: "Non-carrier infrastructure" firms (including Internet companies) now make up more than 30% of revenue, and are expected to continue growing their revenue share.
- FQ4 results, details
Dec. 11, 2014, 7:50 AM
- FQ4 adjusted net loss of $8.2M or $0.08 per share vs. profit of $18.3M or $0.16 one year earlier.
- Adjusted gross margin of 37.9% vs. 40.8% a year ago.
- Converged Packet Optical revenue of $383.3M vs. $350.9M a year ago.
- Packet Networking revenue of $56.4M vs. $61.2M.
- Optical Transport revenue of $26.5M vs. $52.6M.
- Software and Services revenue of $124.8M vs. $118.7M.
- FQ1 revenue expected at $540M-$570M, with adjusted gross margin in the low 40s range, and adjusted operating expense of about $210M.
- Conference call at 8:30 ET
- Previously: Ciena misses by $0.21, beats on revenue
- CIEN -2.7% premarket
Dec. 11, 2014, 7:03 AM
- Ciena (NYSE:CIEN): FQ4 EPS of -$0.08 misses by $0.21.
- Revenue of $591M (+1.3% Y/Y) beats by $1.56M.
Dec. 10, 2014, 5:30 PM
Dec. 9, 2014, 1:52 PM
- Verizon CFO Fran Shammo has promised his company will continue growing wireless capex (albeit while cutting wireline capex) to keep up with data traffic growth. Small cells and smart antennas were mentioned as areas of interest.
- The remarks have been well-received by investors in telecom equipment and component/chip vendors, many of whom have been hit hard by soft North American and (to an extent) European spending. The Nasdaq is up 0.3%.
- Gainers: JDSU +3.6%. FNSR +3.1%. CYNI +10.1%. INFN +2.8%. CIEN +1.9%. AMCC +3.7%. PMCS +3.7%. ZHNE +3%. OCLR +5.4%. AFOP +2.8%. ADTN +2.5%. UBNT +2.2%. XXIA +1.7%. CALX +3.5%. EZCH +2.9%. SONS +2.4%. Sonus is also benefiting from a bullish Wedbush coverage launch.
- The group was pummeled in November after AT&T set a 2015 capex budget of $18B, down from 2014's $21B.
Dec. 5, 2014, 10:34 AM
- Cyan's (NYSE:CYNI) $50M offering offering of convertible senior notes due 2019 carries an interest rate of 8%, and comes with warrants to buy 11.25M shares. The company has an option to issue another $10M worth of notes and related warrants within 13 days of the issuance date.
- The notes feature a conversion price of $2.44/share, and the warrants an exercise price of $3.62/share. Cyan closed at $2.07 yesterday, and was at $2.45 before announcing the offering on Wednesday morning.
- Net proceeds are expected to total $46.6M.
Dec. 3, 2014, 12:11 PM
Dec. 3, 2014, 9:16 AM
- Cyan (NYSE:CYNI) plans to offer $50M worth of convertible senior notes due 2019, and related warrants. An option to issue another $10M exists. The warrants will be exercisable on or after Jan. 15, 2016, and expire on Dec. 15, 2017.
- The optical networking hardware/SDN software vendor had $28.9M in cash and marketable securities at the end of Q3, down from $64.1M at the beginning of the year. Term loans totaled $3.8M.
- With Cyan having a market cap of just $115.5M as of yesterday's close, the offering could prove very dilutive.