Ciena (NYSE:CIEN) saw its stock fall over 13% intra-day on Thursday after the company posted mixed fiscal second-quarter results, with earnings coming in below expectations even as revenue impressed.
The networking technology firm reported adjusted earnings of $0.42 per share for the quarter, trailing Wall Street’s forecast of $0.51. However, revenue reached $1.13 billion, beating the consensus estimate of $1.09 billion and marking a substantial 23.6% increase year-over-year.
The revenue boost was largely fueled by a sharp uptick in Optical Networking sales, which surged to $773.6 million from $560.2 million a year earlier. But this top-line strength was tempered by weaker profitability, as Ciena’s non-GAAP gross margin narrowed to 41% from 43.5% in the same quarter last year.
On a more positive note, the company generated $156.9 million in operating cash flow and continued shareholder returns through buybacks, repurchasing 1.2 million shares worth $84.3 million. Despite these positives, the earnings shortfall weighed on investor sentiment.