adaptive network solutions provider Siena Corporation (NYSE:CIEN) The stock has fallen (-43%) for 11 straight weeks in the 2022 bear market. Optical fiber plays key role in manufacturer’s deployment 5G Infrastructure and increase cordless and quick cloud adoption Feather corner of network. The company also lowered its fiscal 2022 revenue growth percentage by mid-single digits from its previous outlook of 11% to 13%. Shortage comes from all over the industry supply chain constraints Against strong product demand due to growing backlog. Ciena’s book-to-bill ratio increased from $2.2 billion at the end of 2021 to over $4 billion at the end of the second quarter of 2022. Many of the low-value commoditized parts required to product IC and SMIC are primarily sourced. of China, which was affected by the COVID lockdown. Significant demand for Sienna products moving forward the supply chain As challenges they get worse. Demand continues to outpace supply. health benefit The most influential element of performance and revenue growth is the availability of supplies. Prudent investors seeking exposure to broadband network infrastructure solutions may see an opportunistic pullback in Ciena’s shares.
Q2 Fiscal 2022 Earnings Release
On June 2, 2022, Ciena reported its fiscal Q2 2022 results for the quarter ended April 2022. The company reported earnings-per-share (EPS) of $0.50, up by $0.54 (-$0.04) from the consensus analyst estimate. Revenue rose 13.8% year-over-year (YoY) to $949.2 million, missing analyst estimates of $950.86 million. Ciena CEO Gary Smith commented, “Our strong execution in the fiscal second quarter enabled us to deliver 14% year-over-year revenue growth despite an increasingly challenging supply environment. We saw continued order flow and backlog growth in the quarter. Our near-term financial outlook continues to strengthen, reflecting the stability of long-term secular demand drivers. Performance is entirely a function of component availability – not the strong underlying demand in our business.”
Ciena expects fiscal Q3 2022 revenue to be between $870 million and $930 million versus the consensus analyst estimate of $1.08 billion. The company reduced its fiscal year 2022 revenue to mid-single-digit growth from a previous outlook of 11% to 13% growth.
Conference Call Takeaways
CEO Gary Smith noted the good performance in the backdrop of supply chain challenges. The book-to-bill ratio grew more than 1.5X as the backlog continues to grow. Secular positive demand trends are very durable over the long term and CEO Smith is confident that they will capture market share. The significant growth and demand for its technology has added to the ongoing global supply chain challenges. The company has implemented supply chain mitigation strategies, as evidenced by delivering more products in the second quarter of FY 2022 compared to the same period a year ago. Non-telco sales increased 44% year-over-year, including direct web-scale revenue of 22%, up 7% annually mostly due to its WaveServer platform. The company now has six of the top global web-scale companies using Wavelogic 5 Extreme. The company has added 16 new WaveLogic 5E customers for a total of 172. WaveLogic SE shipments grew 50% YoY to over 35,000 globally. The routing and switching business is being conducted by Tier 1 service providers and Tier 2 and 3 customers. He concluded, “Given the overall demand environment, changes in business and consumer behavior have accelerated positive trends for our business, including cloud adoption, a greater focus on the network edge, which can really help customers.” These are strong and sustainable long-term secular drivers for the industry, creating an incredible demand environment for our business.”
CIEN Opportunistic Pullback Level
using the rifle chart Provides an accurate view of the outlook for the CIEN stock on the weekly and daily time frames. The Weekly Rifle Chart posted $78.80 . A shooting star peak formed just below Fibonacci (Fib) Levels, The 5-period moving average (MA) is falling at 47.94 in a weekly Rifle chart downtrend, which is almost overlapping with the weekly 200-period MA at $47.55. The weekly 15-period MA continues to decline at $53.90. The weekly lower Bollinger Band (BB) sits at $38.46. weekly Market Structure Less (MSL) Buying started on a breakout above $40.47. In the daily Rifle chart, a downtrend 5-period MA is at $43.25, 15-period MA is at $47.24 and a daily lower BB is at $39.78. The Daily Stochastic is attempting to cross above the 10-bands. The daily upper BB sits at $55.99 and the daily 200-period MA sits at $59.62. Prudent investors can watch for opportunistic pullback levels at $40.77 Fib, $37.13 Fib, $35.80 Fib, $33.15 Fib, $30.87 Fib, $29.58 Fib and $27.82 Fib levels. There is an upward trajectory from the $50.54 Fib level to the $63.34 Fib level.