Ciena’s revenue up; co. braces for trouble ahead

Thu, 09/04/2008 - 8:30am
Brian Santo

Ciena reported that its third-quarter revenue was up 24 percent from a year ago, to $253.2 million, but it made half the profit – $11.7 million in the quarter just ended, compared with $23.8 million in Q3 2007.

Ciena President and CEO Gary Smith said, “We delivered our eighteenth quarter of sequential revenue growth, gross and operating margins in-line with our targets, and improvement across several key balance sheet metrics.”

During the quarter, Sprint, Cisco and Ciena announced the implementation of 40-gigabits-per-second (Gbps) network capabilities on the Global Sprint Tier 1 IP Network using Ciena’s CoreStream Agility Optical Transport System.

Chile’s VTR Global Com, American Fiber Systems in Georgia, Mzima Networks, Telx and EMC all deployed one version or another of Ciena’s 4200 FlexSelect Advanced Services Platform family.

“In addition to existing customer-specific challenges, we have recently begun to experience order delays from many of our Tier One service provider customers, which we attribute to their guarded approach to capital expenditures given the uncertain macroeconomic environment,” Smith said.

“While we’ve seen no project or order cancellations, sales cycles are lengthening and some deployments are slowing,” he continued. “As a result, we now expect fiscal fourth-quarter revenue in a range of $190 to $210 million.”

“While current economic conditions warrant a cautious near-term outlook, the fundamental drivers of our business – growing capacity demands and the transition to more efficient, more powerful, automated networks – remain sound,” Smith said. “We are confident that our portfolio and value propositions are differentiated, positioning us to take advantage of what is predicted to be a longer-term investment cycle in the transition from SONET/SDH to Ethernet-based networks.”

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