Earnings Preview: Ciena Corporation and Adobe Systems Incorporated

Two noteworthy companies -- communications networking concern Ciena Corporation (NYSE:CIEN) and software giant Adobe Systems Incorporated (NASDAQ:ADBE) -- are set to step into the earnings booth tomorrow. Let's take a closer look at CIEN and ADBE ahead of their quarterly events. 

• Technically speaking, CIEN has dazzled, adding over 41% in the past 12 months to trade at $23.98. However, you wouldn't know this by looking at the stock's sentiment backdrop. For one, short interest is elevated, representing over 12% of the stock's float -- or almost eight days' worth of buying power, at normal daily volumes. What's more, option traders appear to be betting on a post-earnings slide, with CIEN sporting a 10-day put/call volume ratio of 1.22 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This reading outranks 86% of all others from the past year, pointing to a stronger-than-usual preference for put buying. As such, if CIEN can impress with its quarterly results tomorrow morning, an unwinding of this pessimism could work in the shares' favor. 
  
  Looking back, Ciena Corporation has been known to outperform following earnings. The stock has posted positive post-earnings sessions in the past four quarters, with an average gain of 2.6%. This time around, the options market is pricing in a bolder 7.4% post-event swing, according to the security's near-term at-the-money (ATM) straddle data. 
  
  

• ADBE has also been an outperformer, gaining 22.7% in 2015 to trade at $89.27, with the shares hitting a record peak of $92.88 earlier this week. Going back eight quarters, the stock has posted an average move of 5.4% in the session following its earnings release. This time around, traders are anticipating a more ambitious swing of 6.6% following tomorrow night's report, based on near-term ATM straddle data. According to Adobe Systems Incorporated's Schaeffer's put/call open interest ratio (SOIR) of 1.36, put open interest outweighs call open interest among options that expire in the next three months. What's more, this reading is higher than all but 4% of the marks from the past year. In other words, near-term speculators are much more put-skewed than normal.