AT&T Inc. (T), Finisar Corporation (FNSR): Consider Buying Ciena Corporation (CIEN) if It Misses Earnings

Watching the trend
The trend in the optical networking industry also looks positive. Component provider Finisar Corporation (NASDAQ:FNSR), which is a supplier to Ciena, posted terrific results late in June and management stated that both its data communications and telecom businesses were doing well. Moreover, Finisar Corporation (NASDAQ:FNSR)’s management stated over the previous conference call that it is expecting stronger telecom spending in the second half of the year.

Finisar Corporation (NASDAQ:FNSR)’s telecom business has been sluggish of late. Telecom revenue had dropped 12% on a sequential basis in the previous quarter due to lower spending by telecom carriers. But stronger telecom spending in the second half and Finisar Corporation (NASDAQ:FNSR)’s focus on innovation, such as a cost-effective and more efficient 100G module, should get its telecom business back on track.

Finisar Corporation (NASDAQ:FNSR)’s outlook indicates that better times lie ahead for optical networking companies and equipment makers. And given the moves being made by Ciena’s major telecom customers and the sentiment of its supplier, one can expect the company to provide a robust outlook.

The bottom line
It remains to be seen whether or not Ciena Corporation (NASDAQ:CIEN) will beat the highly optimistic bottom line estimate, but the company’s prospects look good. Ciena has a large customer base with important telecom carriers around the world on its client list. The industry also seems to be doing well on the back of network upgrades and growth in cloud computing.

Hence, if Ciena falters after its upcoming earnings report, investors should consider using the opportunity that arises to buy more shares since its long-term prospects appear sound.

The article Consider Buying Ciena if It Misses Earnings originally appeared on Fool.com and is written by Harsh Chauhan.

Harsh Chauhan has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

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