3 Things Ciena Management Wants You to Know

Ciena (NYSE: CIEN), the leading designer of wave division multiplexing (WDM) equipment -- which is optical transmission systems -- for the telecom, service provider, cable, and data center industry, recently reported impressive fiscal third-quarter earnings. Revenue grew 8.7% to $728.8 million while adjusted net income increased 21.4% to $0.51, beating analyst expectations. However, Ciena's stock sold off roughly 10% after management gave underwhelming guidance for the current quarter. Here's why I think the pullback may be a buying opportunity.

For the current quarter, Ciena guided to revenue of only $720 to $750 million, well below analyst estimates of $770 million and amounting to only 2.6% growth.

The company attributed the slowdown to a delay in government contracts (due to the ongoing budget battles in Washington), as well as a few delays in some U.S. regional telecoms going through tough merger integrations. Thus, the delays were due to the health (or lack thereof) of the end customer, not due to Ciena's offerings or long-term opportunity.

Source: Fool.com