Ciena Stock Spikes 18% on Earnings and Plans to Lay Off Up to 5% of Workforce

The networking-equipment company also announces it will be laying off 4% to 5% of its workforce. (Denis Doyle/Bloomberg)

Ciena stock was soaring Thursday after the networking-equipment company breezed past quarterly expectations and announced it would lay off 4% to 5% of its workforce.

Ciena posted adjusted earnings of 67 cents a share for its fiscal third quarter, beating analysts’ consensus of 53 cents. Revenue totaled $1.22 billion, above Wall Street’s estimate of $1.18 billion and up 29% from the prior year.

Shares were climbing 18% to $111.70 on Thursday.

Looking ahead, revenue is expected to grow to between $1.24 billion and $1.32 billion in the fourth quarter, above the $1.21 billion analysts had anticipated. Ciena also believes gross margins, which came in at 41.9% in the third quarter on an adjusted basis, will expand over the coming quarters, said Chief Financial Officer Marc D. Graff on a conference call.

Ciena stock has now soared about 120% over the past 12 months, on the back of strong anticipated demand for artificial-intelligence and cloud-computing bandwidth.

“We delivered another strong quarterly performance that reflects our leadership in high-speed connectivity and ongoing accelerated customer demand as the network becomes fundamental to the underpinning, growth, and monetization of AI,” said CEO Gary Smith in a statement Thursday.

On Thursday’s earnings call, the company also revealed it would slash headcount by 4% to 5% to improve efficiency and align its investments. The layoffs will result in a restructuring expense of around $20 million in the fourth quarter, Graff said. The company has more than 8,600 employees.

Write to Nate Wolf at nate.wolf@barrons.com