Ciena cut its revenue forecast for its fiscal first quarter of 2022, which ended on January 29, but indicated it still expects to achieve double-digit year-on-year growth.
The company said it now expects quarterly revenue to come in between $840 million and $850 million, a substantial drop from its previous guidance which predicted revenue between $870 million and $910 million. However, the new range would still factor out to 12% year on year growth at the midpoint.
On a call with investors, CEO Gary Smith attributed the revenue shortfall to supply chain disruptions which occurred in the back half of the quarter. Specifically, he said turnover was impacted by later-than-expected delivery of key components from a handful of suppliers, which made it impossible to deliver finished goods before the quarter ended. He added the company also faced third-party manufacturing disruptions that took production capacity offline for a certain period of time.
While it normally would have been able to mitigate these issues, Smith noting the timing of the problems in late December and January coincided with a surge in Covid infections that worsened conditions in an already challenged logistics environment. He stressed, though, that demand for its products remains strong.
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“Our book-to-bill ratio in Q1 was in excess of 2.5 of our quarterly revenue. This ultimately resulted in significant backlog growth to more than $3 billion exiting the quarter, providing exceptional visibility for the full fiscal year as we now exit Q1,” Smith stated.
Ciena expects that long component lead times will persist through the remainder of 2022. In response, Smith said it has increased component purchases to boost inventory levels and position itself for a “stronger-than-typical second half.”
The company will report full fiscal Q1 results at 8:30 a.m. on March 7.