Ciena's fiscal fourth-quarter earnings showed a decline year over year, falling short of Wall Street expectations, despite revenue surpassing market estimates. The networking systems and software company reported adjusted earnings of $0.54 per share for the quarter ending November 2, a drop from $0.75 a year earlier, and below the FactSet consensus of $0.65.
Revenue dipped 0.5% year over year to $1.12 billion but exceeded analyst projections of $1.1 billion. Chief Executive Gary Smith acknowledged the challenges, stating, "Our revenue and strong order flow reflect our significant and increasing technology leadership and positive industry dynamics. As cloud and artificial intelligence drive bandwidth demand across the network, we are well-positioned for accelerated revenue growth and market share expansion moving forward." In premarket activity, Ciena shares surged about 13%.
Sales from the networking platform segment totaled $859 million, a reduction from $876.9 million in the previous year. Within this segment, optical networking revenue increased to $779.6 million from $748 million last year, whereas routing and switching revenues fell to $79.4 million from $128.9 million.
The global services segment also experienced a decline in revenue, falling to $142 million from $150.5 million year-over-year. Geographically, revenue from the Americas, which accounted for approximately 76% of Ciena's overall sales, increased to $852.2 million from $801.4 million. However, both Asia-Pacific and Europe, along with the Middle East and Africa, reported declines. Ciena's gross margin saw a decrease, falling to 40.9% from 43.1% the previous year.
Additionally, total operating expenses rose to $400.8 million from nearly $395 million in the same quarter the prior year. In a separate announcement, Ciena revealed the appointment of Lawton Fitt as independent chair of its board of directors, effective December 11. Fitt has been serving as a director since November 2000.
Patrick Nettles has stepped down as executive chair, opting not to seek reelection at Ciena's 2025 annual shareholders' meeting..