Ciena shares drop 19% after earnings beat, outlook raised

Shares of Ciena Corporation fell sharply on Thursday, a significant decline that came despite the company reporting quarterly results that exceeded analyst expectations and raising its full-year financial outlook. The stock closed down approximately 19%, a stark contrast to the broader market's modest gains.

For its fiscal second quarter, which ended on May 2, the networking equipment provider reported adjusted earnings of $1.64 per share on revenue of $1.57 billion. These figures surpassed the average analyst estimates of $1.46 per share and $1.50 billion in revenue. The company's revenue grew roughly 40% compared to the same period last year.

Alongside the earnings report, Ciena raised its financial guidance for the full 2026 fiscal year. The company now expects revenue of approximately $6.3 billion, an increase from its prior forecast range of $5.9 billion to $6.3 billion. It also raised its projected adjusted gross margin. For the upcoming third quarter, management anticipates revenue of about $1.6 billion to $1.7 billion.

The strong quarterly performance was driven by significant growth across its business segments. Revenue from its core Optical Networking segment reached...