| From Briefing.com: Ciena (CIEN) 96 13/16 -3: Traders are taking a cautious approach to tomorrow's earnings release from Ciena as the talk of decreased telecom capital spending has the investment community on its heels regarding communications equipment suppliers. Aside from reduced capex forecasts at the big telcos, Ciena has also been hit by talk of increased bad debt allowances, as analysts have questioned the creditworthiness of some of their European customers. As if that wasn't enough, recent talk of Sprint (FON) selecting another supplier (Alcatel: ALA) for DWDM equipment has also been weighing on the shares. The proof is in the numbers, and tomorrow Ciena is scheduled to release Q4 (Oct) earnings before the market opens. First Call's consensus mean EPS estimate is $0.13 with the range of 22 estimates falling between $0.11 and $0.14. Revenues are expected to be in the $275-285 mln range with the mean of the 10 brokerage estimates we found falling at $279.3 mln. That mean estimate represents a q/q increase of 19.7% and annual growth of 97.5%. However, we should note that Ciena has a history of exceeding estimates, and simply meeting their numbers, even in this bearish telecom environment, will be viewed as disappointing. Most Street analysts aren't worried about that however, as almost all the previews we read expected the company to beat their numbers. The expectations are high, and should Ciena beat estimates, as most are predicting, and if the broader market cooperates, it could give the entire sector a lift tomorrow. However, trading floor talk this afternoon has placed whisper numbers as high as $0.14 EPS and $300 mln revenues, which sets the revenue hurdle extremely high considering the environment. - Matt Gould, Briefing.com |
