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Ciena® Corporation ( CIEN), the network specialist, today announced unaudited financial results for its fiscal second quarter ended April 30, 2014.
For the fiscal second quarter 2014, Ciena reported revenue of $560.0 million as compared to $507.7 million for the fiscal second quarter 2013.
On the basis of generally accepted accounting principles (GAAP), Ciena's net loss for the fiscal second quarter 2014 was $(10.2) million, or $(0.10) per common share, which compares to a GAAP net loss of $(27.1) million, or $(0.27) per common share, for the fiscal second quarter 2013.
Ciena's adjusted (non-GAAP) net income for the fiscal second quarter 2014 was $19.4 million, or $0.17 per diluted common share, which compares to an adjusted (non-GAAP) net income of $2.2 million, or $0.02 per diluted common share, for the fiscal second quarter 2013.
“As a direct result of our expanding role and reach in the industry, we delivered strong financial results in both our second quarter and first half of fiscal 2014, including continued revenue growth and increased operating leverage,” said Gary B. Smith, president and CEO, Ciena. “As the shift continues toward on-demand networking models and as we continue to diversify our business, we expect to deliver steadily improving financial performance, including performance in the second half of the year that is stronger than the first half.”
Fiscal Second Quarter 2014 Performance Summary
The tables below (in millions, except percentage data) provide comparisons of certain quarterly results to prior periods, including sequential quarter and year-over-year changes. A reconciliation between the GAAP and adjusted (non-GAAP) measures contained in this release is included in Appendix A.
| | | | | GAAP Results | | | Q2 | | Q1 | | Q2 | | Period Change | | | FY 2014 | | FY 2014 | | FY 2013 | | Q-T-Q* | | Y-T-Y* | | Revenue | | $ | 560.0 | | | $ | 533.7 | | | $ | 507.7 | | | 4.9 | % | | 10.3 | % | | Gross margin | | 42.4 | % | | 42.3 | % | | 41.3 | % | | 0.1 | % | | 1.1 | % | | Operating expense | | $ | 230.5 | | | $ | 222.5 | | | $ | 220.1 | | | 3.6 | % | | 4.7 | % | | Operating margin | | 1.3 | % | | 0.6 | % | | (2.1 | )% | | 0.7 | % | | 3.4 | % | | | | | | | | | | | |
| | | | | Non-GAAP Results | | | Q2 | | Q1 | | Q2 | | Period Change | | | FY 2014 | | FY 2014 | | FY 2013 | | Q-T-Q* | | Y-T-Y* | | Revenue | | $ | 560.0 | | | $ | 533.7 | | | $ | 507.7 | | | 4.9 | % | | 10.3 | % | | Adj. gross margin | | 43.1 | % | | 43.4 | % | | 42.5 | % | | (0.3 | )% | | 0.6 | % | | Adj. operating expense | | $ | 206.3 | | | $ | 199.8 | | | $ | 197.4 | | | 3.3 | % | | 4.5 | % | | Adj. operating margin | | 6.2 | % | | 5.9 | % | | 3.7 | % | | 0.3 | % | | 2.5 | % | | | | | | | | | | | |
| | | | | Revenue by Segment | | | Q2 FY 2014 | | Q1 FY 2014 | | Q2 FY 2013 | | | Revenue | | % | | Revenue | | % | | Revenue | | % | | Converged Packet Optical | | $ | 356.8 | | 63.7 | | $ | 333.4 | | 62.5 | | $ | 294.3 | | 57.9 | | Packet Networking | | 66.5 | | 11.9 | | 51.7 | | 9.7 | | 54.2 | | 10.7 | | Optical Transport | | 29.6 | | 5.3 | | 40.1 | | 7.5 | | 57.4 | | 11.3 | | Software and Services | | 107.1 | | 19.1 | | 108.5 | | 20.3 | | 101.8 | | 20.1 | | Total | | $ | 560.0 | | 100.0 | | $ | 533.7 | | 100.0 | | $ | 507.7 | | 100.0 | | | | | | | | | | | | | | | | |
*
| | Denotes % change, or in the case of margin, absolute change
| | | |
Additional Performance Metrics for Fiscal Second Quarter 2014
Non-U.S. customers contributed 42% of total revenue
One customer accounted for greater than 10% of revenue and represented 21.5% of total revenue
Cash and investments totaled $430.2 million
Cash flow from operations totaled $2.0 million
Average days' sales outstanding (DSOs) were 83
Accounts receivable balance was $515.0 million
Inventories totaled $294.0 million, including:Raw materials: $56.7 millionWork in process: $7.9 millionFinished goods: $181.0 million
Deferred cost of sales: $95.9 million
Reserve for excess and obsolescence: $(47.5) million
Product inventory turns were 3.5
Headcount totaled 4,998
Business Outlook for Fiscal Third Quarter 2014
Statements relating to business outlook are forward-looking in nature and actual results may differ materially. These statements should be read in the context of the Notes to Investors below.
Ciena expects fiscal third quarter 2014 financial performance to include:
Revenue in the range of $585 to $615 million
Adjusted (non-GAAP) gross margin in the low to mid 40s percent range
Adjusted (non-GAAP) operating expense to be approximately $210 million range |
