Ciena, the optical networking vendor, today announced unaudited financial results for its fiscal second quarter ended April 30, 2014. Results and third quarter forecasts were much better than expected.

For the fiscal second quarter 2014, Ciena reported revenue of $560.0 million as compared to $507.7 million for the fiscal second quarter 2013.
On the basis of generally accepted accounting principles (GAAP), Ciena’s net loss for the fiscal second quarter 2014 was $(10.2) million, or $(0.10) per common share, which compares to a GAAP net loss of $(27.1) million, or $(0.27) per common share, for the fiscal second quarter 2013.
Ciena’s adjusted (non-GAAP) net income for the fiscal second quarter 2014 was $19.4 million, or $0.17 per diluted common share, which compares to an adjusted (non-GAAP) net income of $2.2 million, or $0.02 per diluted common share, for the fiscal second quarter 2013.

“As a direct result of our expanding role and reach in the industry, we delivered strong financial results in both our second quarter and first half of fiscal 2014, including continued revenue growth and increased operating leverage,” said Gary B. Smith, president and CEO, Ciena. “As the shift continues toward on-demand networking models and as we continue to diversify our business, we expect to deliver steadily improving financial performance, including performance in the second half of the year that is stronger than the first half.”

Furthermore, Ciena guidance for the third quarter of 2014 financial was very encouraging:
• Revenue in the range of $585 to $615 million
• Adjusted (non-GAAP) gross margin in the low to mid 40s percent range
• Adjusted (non-GAAP) operating expense to be approximately $210 million range

Now the tough question: what does this really mean? The quarterly report states that one customer (AT&T?) constitutes 21.5% of their sales. Is this an AT&T story? Or with with the lumpy purchases of service providers, did Ciena see a big, one-time lump? Or is Ciena really outpacing the industry? Or is the telecom industry in a real upturn? One quarter from one vendor is not enough to decipher a trend. But let’s hope that this is the first sign of an industry upturn.