Why Is Networking Company Ciena Stock Plunging Thursday?
Portfolio Pulse from Anusuya Lahiri
Ciena Corp (NYSE:CIEN) reported a slight revenue decline in Q1 fiscal 2024, with $1.04 billion versus the expected $1.02 billion, and an adjusted EPS of $0.66, beating the consensus of $0.48. Despite these beats, CIEN stock plunged due to a revenue decline in its Networking Platforms segment and a lower than expected revenue outlook for fiscal 2024. The company also forecasts a Q2 revenue below consensus and expects adjusted gross margins in the low-40s% for Q2. Investors can also gain exposure to CIEN through SPDR S&P Telecom ETF (NYSE:XTL) and The Future Fund Active ETF (NYSE:FFND).
March 07, 2024 | 4:15 pm
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NEGATIVE IMPACT
Ciena Corp reported a slight revenue decline but beat EPS estimates for Q1 fiscal 2024. Despite this, the stock plunged due to a disappointing revenue outlook for fiscal 2024 and a Q2 revenue forecast below consensus.
Despite beating Q1 fiscal 2024 earnings and revenue expectations, CIEN's stock plunged due to a disappointing revenue outlook for fiscal 2024 and a Q2 revenue forecast significantly below consensus. This indicates a negative short-term impact on CIEN's stock price as investor sentiment may be affected by the lower than expected future revenue growth and concerns over the next quarter's performance.
CONFIDENCE 90
IMPORTANCE 90
RELEVANCE 100
NEGATIVE IMPACT
The Future Fund Active ETF (FFND), which can include CIEN as part of its holdings, might see an indirect impact due to CIEN's stock performance post-Q1 fiscal 2024 earnings.
FFND, which has the potential to hold CIEN in its portfolio, may face an indirect negative impact due to the plunge in CIEN's stock following its Q1 fiscal 2024 earnings announcement. The impact level would be influenced by the proportion of CIEN within the ETF.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 50
NEGATIVE IMPACT
SPDR S&P Telecom ETF (XTL), which includes CIEN as part of its holdings, may see indirect impact due to CIEN's stock plunge following its Q1 fiscal 2024 earnings report.
Given that XTL holds CIEN within its portfolio, the ETF might experience an indirect negative impact due to CIEN's stock price plunge following its Q1 fiscal 2024 earnings report. The extent of the impact would depend on CIEN's weight within the ETF.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 50