Why Ciena Stock Soared Early Wednesday

Optical Network Equipment Company Stock Ciena Communications (CIEN -0.76%) rose earlier on Wednesday after a quarterly report that pleased investors. Shares were up 7% at one point, but by 3:30 p.m., Ciena shares were almost flat with where they closed the day before.

Convincing third quarter hits

Well before the market opened, Ciena revealed its fiscal 2024 third quarter fundamentals, giving market players plenty of time to digest them. For the period, the specialty technology company posted revenue of just over $942 million, down from $1.07 billion in the same period last year. Non-GAAP net income (adjusted) saw a steeper decline, falling to $50.8 million ($0.35 per share) from $89.1 million a year ago.

Despite the declines, Ciena easily beat analysts’ estimates on both the top and bottom lines. On average, forecasters following the stock were modeling just over $927 million in revenue and just $0.26 per share in adjusted net income.

In the company’s earnings release, it quoted CEO Gary Smith as attributing the better-than-expected performance to “increasing momentum with cloud providers and continued gradual recovery with service providers.”

While the twin beats were impressive, there is still cause for concern with the Ciena. Those headline numbers continue to decline, and Ciena will continue to operate in a market that — despite Smith’s rosy statements — isn’t particularly buoyant.

The CFO is stepping down, though not immediately

Separately, Ciena announced a major shakeup in the C-suite. It said CFO James Moylan plans to retire and step down on August 28, 2025. The company said it would begin a formal search for a successor, although it did not provide a timeline for that. Moylan will continue to serve in that role until a successor is in place, Ciena added. Investors will have to wait to see who takes the job.