Bullish stock to watch: Ciena Corporation (NYSE: CIEN)

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Ciena Corporation (NYSE: CIEN) stock surged 20.36% on December 12th, 2019 and continued its bullish momentum on 13th December, 2019 (As of 10:25 am GMT-5; Source: Google finance) after the company posted decent result for the fourth quarter of FY 19. Net income totaled $80.3 million, up from 64 million, last year. In Q4, the company has reported the adjusted operating margin of 13.3% and adjusted net income of $90.4 million. Further, in Q4, the adjusted EBITDA was $152 million and cash from operations was $240 million. CIEN has ended the quarter with approximately $1 billion in cash and investments.

CIEN in the fourth quarter of FY 19  has reported the adjusted earnings per share of 58 cents, missing the analysts’ estimates for the adjusted earnings per share of 63 cents, according to FactSet. The company had reported the adjusted revenue growth of 7.6 percent to $968 million in the fourth quarter of FY 19, beating the analysts’ estimates for revenue of $964 million. Q4 adjusted gross margin was 43.8%. Adjusted operating expense in the quarter was $295 million. This was higher than expected, mainly due to higher variable compensation tied to the strong performance in the quarter and the year, as well as a one-off charge for doubtful accounts in Latin America. Unbilled contract asset balance was $84 million. The Average days’ sales outstanding (DSOs) were 75 and 82 for the fiscal quarter and year, respectively

In the fourth quarter, the company had repurchased approximately 1 million shares for $38 million to close out the year with total amount repurchased of approximately $150 million.

For the full fiscal year 2019, the annual revenue increased from 15% from fiscal 2018, which was significantly above the target growth rate of 6% to 8% and well above market growth. The company has gained approximately 3 percentage points of market share as a result of this performance in 2019. Adjusted EPS was $2.11 for the FY 19, which greatly exceeded the target 20 plus percent annual growth rate.

In 2020, the company expects adjusted OpEx to be flat to slightly down from fiscal 2019 levels in the average range of $270 million to $275 million per quarter and adjusted operating margin to be of 15%.

For the fiscal first quarter 2020 the company expects the revenue to be in a range of $805 million to $835 million. Adjusted gross margin is expected to be in the range of 42% to 44% range, and adjusted operating expense to be of approximately $265 million.

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