Ciena stock gained nearly 13 percent today after the company’s second-quarter earnings bucked the current trend of gloom.
Ciena blew out analysts’ predictions for net income, turning in a non-GAAP figure of 34 cents per share. Thomson Financial had reported a consensus estimate of 27 cents.
The company also benefited from lowered expectations, having previously told investors to expect a tepid quarter of $615 million to $645 million in revenues. The actual figure for the second quarter, which ended April 30, turned out to be $641 million.
Ciena cited a boost in sales in the Asia-Pacific region — India and Australia, in particular, as Raymond James analyst Simon Leopold wrote in a research note today — and from its partnership with Ericsson.
“We suspect investors were worried about a third disappointing report in a row, and that was not the case,” Leopold wrote.
Like Cisco and other telecom equipment providers, Ciena is wrestling with a transition to the business models of software. Ciena is moving to subscription-based pricing for some of its products, for instance, and the company has put a spotlight on Blue Planet, the software-defined networking (SDN) orchestration platform acquired with Cyan last year.
But software — which for Ciena includes Blue Planet, standalone network management, and subscription-based software services — represents less than 2 percent of overall sales.
Officials have emphasized that they don’t expect substantial revenues this year from Blue Planet nor from software in general.
“The trends are good, but we are not expecting a lot of software revenue in the second half of this year,” CFO James Moylan said on today’s earnings call.
Ciena’s second-quarter revenues of $641 million represented a 3 percent increase from $622 million in the same quarter the previous year. Net income was $14 million, or 10 cents per share, down from $20.7 million, or 17 cents per share, a year ago.
Ciena’s stock ended the day up 12.8 percent at $20.03.