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Ciena (CIEN) Degree of Financial Leverage : 1.57 (As of Apr. 2024)


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What is Ciena Degree of Financial Leverage?

Degree of Financial Leverage (DFL) measures the percentage change in EPS for a unit change in Earnings Before Interest and Taxes (EBIT). Ciena's Degree of Financial Leverage for the quarter that ended in Apr. 2024 was 1.57. The higher Degree of Financial Leverage, the more volatile earnings will be.

The industry rank for Ciena's Degree of Financial Leverage or its related term are showing as below:

CIEN's Degree of Financial Leverage is ranked worse than
82.65% of 2444 companies
in the Hardware industry
Industry Median: 0.99 vs CIEN: 1.57

Ciena Degree of Financial Leverage Historical Data

The historical data trend for Ciena's Degree of Financial Leverage can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Ciena Degree of Financial Leverage Chart

Ciena Annual Data
Trend Oct14 Oct15 Oct16 Oct17 Oct18 Oct19 Oct20 Oct21 Oct22 Oct23
Degree of Financial Leverage
Get a 7-Day Free Trial Premium Member Only Premium Member Only -2.28 1.15 28.98 1.28 0.89

Ciena Quarterly Data
Jul19 Oct19 Jan20 Apr20 Jul20 Oct20 Jan21 Apr21 Jul21 Oct21 Jan22 Apr22 Jul22 Oct22 Jan23 Apr23 Jul23 Oct23 Jan24 Apr24
Degree of Financial Leverage Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 2.78 0.44 0.89 0.70 1.57

Competitive Comparison of Ciena's Degree of Financial Leverage

For the Communication Equipment subindustry, Ciena's Degree of Financial Leverage, along with its competitors' market caps and Degree of Financial Leverage data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.


Ciena's Degree of Financial Leverage Distribution in the Hardware Industry

For the Hardware industry and Technology sector, Ciena's Degree of Financial Leverage distribution charts can be found below:

* The bar in red indicates where Ciena's Degree of Financial Leverage falls into.



Ciena Degree of Financial Leverage Calculation

Ciena's Degree of Financial Leverage for the quarter that ended in Apr. 2024 is calculated as:

Degree of Financial Leverage=% Change in Earnings per Share (Diluted)**/% Change in EBIT
=( 1.04 (Apr. 2024) / 1.35 (Apr. 2023) - 1 )/( 286.237 (Apr. 2024) / 335.181 (Apr. 2023) - 1 )
=-0.2296/-0.146
=1.57***

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

** TTM data of EPS and EBIT was used to calculate Degree of Financial Leverage.
*** Please be aware that the Degree of Financial Leverage calculations are based on company-level data using the primary share class. The calculated data provided is for demonstration purposes and may slightly differ from the results displayed in the title due to potential variations caused by currency exchange rate differences throughout the year.


Ciena  (NYSE:CIEN) Degree of Financial Leverage Explanation

Degree of Financial Leverage (DFL) is a leverage ratio that measures the sensitivity of a company’s Earnings per Share (EPS) to fluctuations in its operating income, also referred to as Earnings Before Interest and Taxes (EBIT), resulting from adjustments in its capital structure. DFL is an essential tool for companies to assess the appropriate level of debt or financial leverage in their capital structure. When EBIT remains relatively stable, it results in stable earnings and earnings per share. In such cases, the company may consider taking on substantial debt. However, for companies operating in industries with significant fluctuations in EBIT, it is advisable to keep debt at a manageable level.

The higher Degree of Financial Leverage, the more volatile earnings will be. Because interest is a fixed expense, leverage can amplify earnings and EPS. This is beneficial when EBIT is growing, but it can become problematic in tough economic conditions when EBIT is under pressure.

Be Aware

The use of financial leverage varies across different industries and business sectors, and the application of Degree of Financial Leverage (DFL) should be adjusted accordingly.


Ciena Degree of Financial Leverage Related Terms

Thank you for viewing the detailed overview of Ciena's Degree of Financial Leverage provided by GuruFocus.com. Please click on the following links to see related term pages.


Ciena (CIEN) Business Description

Industry
Address
7035 Ridge Road, Hanover, MD, USA, 21076
Ciena Corp is a network and technology company. It provides network hardware, software, and services that support the transport, switching, aggregation, service delivery, and management of video, data, and voice traffic on communications networks. It serves various industries such as communication services providers, web-scale providers, cable operators, government, and large enterprises world-wide. The business activities function through Networking Platforms; Platform Software and Services; Blue Planet Automation Software, and Global Services segments. Geographically, its presence is seen in the markets of the United States, Canada, the Caribbean, Latin America, Europe, the Middle East, Africa, the Asia Pacific, Japan, and India. The maximum revenue is generated from Americas.
Executives
David M Rothenstein officer: Sr. VP, General Counsel 7035 RIDGE ROAD, HANOVER MD 21076
Gary B Smith director, officer: President, CEO C/O CIENA CORPORATION, 7035 RIDGE ROAD, HANOVER MD 21076
Brodie Gage officer: SVP Global Products & Supply 2351 ALFRED-NOBEL BLVD, SUITE N-300, SAINT LAURENT A8 H4S 2A9
Dino Diperna officer: SVP Global R&D 385 TERRY FOX DR, OTTAWA A6 K2K OL1
Jason Phipps officer: SVP Global Sales and Marketing 7410 RIDGE RD, HANOVER MD 21076
Joseph Cumello officer: SVP, General Mgr. Blue Planet 7035 RIDGE RD, HANOVER MD 21076
Scott Mcfeely officer: SVP, Networking Platforms 7035 RIDGE RD, HANOVER MD 21076
Mary G Puma director AXCELIS TECHNOLOGIES INC., 108 CHERRY HILL DRIVE, BEVERLY MA 01915
Andrew C Petrik officer: VP, CONTROLLER 7035 RIDGE ROAD, HANOVER MD 21076
Sheela Kosaraju officer: SVP, General Counsel 43-51 WORSHIP ST, LONDON X0 EC2A 2DX
Stephen B Alexander officer: SVP, Chief Technology Officer C/O CIENA CORPORATION, 7035 RIDGE ROAD, HANOVER MD 21076
Rick Hamilton officer: SVP, Software and Services 9500 AMBERGIEN, AUSTIN TX 78729
Moylan James E Jr officer: SVP Finance, CFO CIENA CORPORATION, 7035 RIDGE ROAD, HANOVER MD 21076
Judith M Obrien director 855 MAUDE AVENUE, MOUNTAIN VIEW CA 94043
Thomas Michael Nevens director C/O BORLAND SOFTWARE CORPORATION, 20450 STEVENS CREEK BLVD, SUITE 800, CUPERTINO CA 95014