Why Ciena should go higher
An uptick in spending by AT&T is certainly one of the reasons why Ciena Corporation (NASDAQ:CIEN) should continue getting better as the year progresses. But apart from that, there are a few more reasons which call for attention.
The company is expanding its reach across the globe, driven by its open architecture which has helped it land Tier 1 design wins. Ciena worked its way into the books of Comcast Corporation (NASDAQ:CMCSA), Tata and Reliance Globalcom in the previous quarter, and this is an evidence of its cutting-edge technology. Ciena has seen a constant improvement in orders over the past few quarter, and the trend continued this time as order inflow in the quarter exceeded revenue of $453 million.
Ciena is witnessing strong customer adoption of its converged architecture, a solution that delivers optical transport, OTN switching, and packet switching. Ciena believes the uniqueness of this solution has helped it land customers in North America, Latin America, and the Asia-Pacific. Ciena’s North American customers are moving from the planning to the deployment phase for this architecture, and this should result in better revenue from the region this year.
The company also cut a deal with Telefónica Vivo, the largest mobile operator in Brazil last month, for providing its 100G solution based on the coherent architecture. Moreover, Ciena said that its European business is showing signs of stability.
Thus, all in all, the future is looking good for Ciena. An uptick in carrier spending, along with global expansion, customer wins, and market share gains should put concerns of weak growth and slow demand to rest.
The article This Stock Proves That Myopia Doesn’t Deserve a Place in Investing originally appeared on Fool.com and is written by Harsh Chauhan.
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