Have You Seen Ciena Corporation (CIEN)’s Good News?

Ciena Corporation (NASDAQ:CIEN)When optical networking expert Ciena Corporation (NASDAQ:CIEN) reported earnings on Thursday morning, it sparked a wholesale revival across the industry.

Sales improved 6% year over year to $508 million, yielding a $0.02 net profit per share. Analysts were looking for $484 million and a $0.01 loss per share, and management raised next-quarter revenue guidance well above Wall Street’s targets.

Ciena Corporation (NASDAQ:CIEN)’s own shares jumped more than 17% on Thursday, setting fresh 52-week highs. But this victory parade wasn’t Ciena’s personal party. Investors took the strong report as a sign of renewed spending on high-speed networking infrastructure, and the rising tide lifted lots of boats.

Close competitor NeoPhotonics Corp (NYSE:NPTN) soared 15% higher. Larger rival JDS Uniphase Corp (NASDAQ:JDSU) jumped 7.9% to become the fastest gainer on the S&P 500. If Ciena Corporation (NASDAQ:CIEN) can beat its own expectations in selling Internet backbone equipment to a bevy of major telecoms, its chief rivals must eventually follow suit. JDS Uniphase Corp (NASDAQ:JDSU) is only one month removed from its latest quarterly report, which sent shares diving 7% overnight (but all was forgiven a week later). NeoPhotonics Corp (NYSE:NPTN) also reported in early May, but didn’t make any waves then.

Watching Ciena Corporation (NASDAQ:CIEN) come on strong only four weeks later tells us one of two things: Either Ciena is killing its rivals in the marketplace, or the sluggish networking sector is finally due for a big order bounce.

Ciena Corporation (NASDAQ:CIEN) CEO Gary Smith certainly gave investors reason to believe in the latter. “Basically, the architectural changes taking place in the network today are all driven essentially by the end user,” he said on Thursday’s analyst call. “For example, networks are now being affected by tremendous growth in cloud computing, mobility and machine-to-machine applications, profound and highly disruptive movements that are only just beginning.”

Smith also expected the company to grow faster than the market, but it’s pretty much his job to present Ciena as a market leader. There’s no doubt in my mind that the global networking market is overdue for a spending boost, especially in the light of high-speed mobile connections going mainstream everywhere. Ciena Corporation (NASDAQ:CIEN) taps into that trend, but needs to watch out for rivals like JDS Uniphase Corp (NASDAQ:JDSU) and NeoPhotonics Corp (NYSE:NPTN) along the way. All things considered, I think the market reaction this week was just about correct across the optical sector.

The article Have You Seen Ciena’s Good News? originally appeared on Fool.com and is written by Anders Bylund.

Fool contributor Anders Bylund holds no position in any company mentioned. Check out Anders’ bio and holdings or follow him on Twitter and Google+. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Biotech Insider Alert - $6 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The World’s Most Famous Circuses

Best Hair Stylists

Most Popular NASCAR Drivers

The Best Romance Movies of all Time

The Most Wanted Drug Lords

The Oldest Money Managers

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Best Travel Destinations in Australia

World’s Most Expensive Musical Instruments

World’s Most Famous Animals

Most Expensive Cakes in the World

Most Expensive Kosher Champagne in the World

Most Expensive Kosher Wine in the World

The Most Surprisingly Dark Fairy Tales

Most Popular Travel Destinations in Asia

The 10 Most Expensive Dresses Ever Worn to the Oscars

World’s Most Visited Art Museums

Best Countries for Photographers to Work in

Best Paid Jobs in the Film Industry

The Most Renowned Recovered Paintings Ever

Child Stars That Turned out Just Fine

Books That Were Banned in the Past Century

World’s Richest Dancers

Best Remedies against Bad Breath

Foods That Improve Your Skin Texture

Best-Selling Children’s Books of all Time

Foods That Boost Your Libido

Best-Selling Books of all Time

The Most Expensive Academy Awards Jewelry in History

Most Expensive Japanese Restaurant In New York City

The Best B-Boy Movies

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!