01—Abstract
Summary
Summary of the 10-Q filed March 8, 2012. Cited figures are marked; the original filing is the authoritative source.
Ciena Corporation (CIEN) reported its first quarter fiscal year 2012 results, ending January 31, 2012.
The company experienced a year-over-year decline in total revenue, which fell to $416.7 milliona from $433.3 million in the prior year's comparable quarter. This revenue decrease was primarily driven by a significant drop in Packet-Optical Transport revenue, though partially offset by growth in Packet-Optical Switching and Software and Services. Despite the revenue decline, Ciena managed to significantly reduce its net loss to $47.7 million ($0.49 per share) from $79.1 million ($0.84 per share) in the first quarter of fiscal year 2011.
This improvement in profitability was largely due to a substantial decrease in operating expenses, particularly in areas like acquisition and integration costs, and amortization of intangible assets. The company also generated positive cash flow from operations of $12.9 millionb, a marked improvement from the negative cash flow of $63.7 million in the prior year's first quarter.
02—Key points
Key Highlights
- Total revenue decreased by 3.8% year-over-year to $416.7 million.
- Net loss improved significantly to $47.7 million ($0.49 per share) from $79.1 million ($0.84 per share) in the prior year period.
- Operating expenses decreased by 17.9% to $198.9 million, driven by reductions in acquisition, integration, and amortization costs.
- The company generated positive cash flow from operations of $12.9 million, a substantial improvement from negative $63.7 million in the prior year.
- Packet-Optical Transport revenue, the largest segment, saw a 7.1% decline, while Packet-Optical Switching revenue grew by 23.1%.
- Cash and cash equivalents increased to $550.5 million from $541.9 million at the end of the previous fiscal year.
- The company's consolidated gross margin improved to 40.3% from 38.9% in the prior year period.
03—One dollar
Follow one dollar
For each $1.00 of revenue in Q1 FY2012, Ciena Corp lost $0.11.
- Revenue$416.7M100.0%
- Cost of revenue−$248.9M59.7%
- Gross profit$167.8M40.3%
- Operating costs−$198.9M47.7%
- Operating income−$31.2M7.5%
- Interest, other & tax−$16.5M4.0%
- Net income−$47.7M11.4%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2012filed March 8, 2012Financial Statements
Q1 FY2012 against Q1 FY2011
| Line item | Q1 FY2012Q1 FY2011 | Change |
|---|---|---|
| Revenue | $416.69M$433.31M | −3.8% |
| Cost of Revenue | $248.93M$264.80M | −6.0% |
| Gross Profit | $167.76M$168.51M | −0.4% |
| R&D Expenses | $89.66M$95.79M | −6.4% |
| Operating Expenses | $198.93M$242.40M | −17.9% |
| Operating Income | -$31.18M-$73.89M | +57.8% |
| Interest Expense | $9.57M$9.55M | +0.2% |
| Net Income | -$47.65M-$79.06M | +39.7% |
| EPS (Basic) | $-0.49$-0.84 | +41.7% |
| EPS (Diluted) | $-0.49$-0.84 | +41.7% |
| Shares Outstanding (Basic) | 98.07M94.50M | +3.8% |
| Shares Outstanding (Diluted) | 98.07M94.50M | +3.8% |
05—Questions
Frequently Asked Questions
What was Ciena's revenue performance in Q1 FY2012 compared to Q1 FY2011?
Ciena's total revenue for the first quarter of fiscal year 2012 was $416.7 million, a decrease of 3.8% compared to $433.3 million in the same period of fiscal year 2011. The Packet-Optical Transport segment experienced a 7.1% revenue decline, while Packet-Optical Switching saw a 23.1% increase.
How did Ciena's profitability change in Q1 FY2012?
Ciena significantly improved its profitability by reducing its net loss. The net loss for the quarter was $47.7 million, or $0.49 per share, a substantial improvement from a net loss of $79.1 million, or $0.84 per share, in the first quarter of fiscal year 2011. This was driven by lower operating expenses and improved gross margin.
What was the cash flow situation for Ciena in Q1 FY2012?
Ciena generated positive cash flow from operating activities of $12.9 million in the first quarter of fiscal year 2012. This is a significant turnaround from the negative cash flow of $63.7 million reported in the first quarter of fiscal year 2011. The company's cash and cash equivalents increased to $550.5 million.
What are the main factors impacting Ciena's revenue and profitability?
Key factors impacting Ciena's performance include intense competition, especially in the Packet-Optical Transport segment, leading to pricing pressure and less favorable commercial terms. Macroeconomic conditions and reduced capital expenditure by customers also create uncertainty. The company is also navigating a transition to next-generation technology platforms and relying on third-party manufacturers and suppliers, which introduces supply chain risks. Significant customer concentration also poses a risk.
06—Continue