From a Barron's Blog:

 

Shares of fiber optics giant Ciena (CIEN) are down $3.71, or over 15%, at $20.40, in early trading, after the company this morning reported fiscal Q4 revenue and profit that topped analysts’ expectations, but missed with its Q1 outlook by a wide margin, and also missed with its outlook for next year.

Revenue in the three months ended in October rose 17%, year over year, to $692 million, yielding EPS of 42 cents, excluding some costs.

Analysts had been modeling $684 million and 38 cents.

Gross profit margin was 44.9% while operating margin was 13%.

CEO Gary Smith called the year ended “strong,” adding “We believe that our proven ability to drive operating leverage from the business, when combined with strong market drivers from the next phase of network transformation, positions us well to deliver continued growth and profitability in fiscal 2016 and beyond.”

For the current quarter, the company sees revenue in a range of $555 million to $590 million, which is below the consensus for $636 million.

For the full year, the company sees revenue of $2.64 billion to $2.67 billion, below consensus for $2.77 billion. That’s revenue growth of 9%, at the high end, which is above the 7% of the year just ended.

The company is modeling operating margin this year of just 11% to 12%, below last year’s level. However, on the call, the company forecast an expansion to 15% operating profit margin over the next 3 to 4 years.

Analysts are still going through the details, having just come off the conference call. One early note, from Wells Fargo’s Jess Lubert, who has an Outperform rating on the shares, who noted that the revenue forecast this quarter “implies non-GAAP EPS of roughly $0.12 to $0.20, well below our prior forecast of $0.32 and consensus of $0.28.”

He urges investors not to give up:

We remain positive despite soft outlook. While we are disappointed by Ciena’s FQ1 and F2016 outlook, we sense the company’s forecast likely embeds conservative assumptions surrounding the Cyan business and the timing of revenue recognition on several large opportunities. That said, with Ciena having secured 100G metro deployments with many of the world’s largest carriers and likely to see improved mix further benefit margins, we remain positive regarding the company’s 2016/2017 prospects and see the potential for the current forecast to prove conservative if execution remains strong. As a result, we believe weakness following today’s (12/10) results will likely present an attractive entry point.