Ciena: Reiterate Buy Rating, Worst Of This Cycle May Be Over

On 06/06/2024, CIEN released its 2Q24 earnings, which saw revenue of $911 million vs. consensus of$895 million. The higher-than-expected revenue was driven by better performance in telecom and government. Gross margins saw 43.5%, which was modestly better than consensus at 42.7%. However, because of the fixed cost nature of the business, opex as a percentage of revenue grew to 36.7% vs. 29.8% in 2Q23 and 32.5% in 1Q24; hence, operating margin declined to 6.9%. Inventories are coming down to more healthy le ...