Ciena Revenue and Profit
Surged in Fourth Quarter
By Shawn Young
Staff Reporter of The Wall Street Journal
Ciena Corp. said net income for the fiscal fourth quarter more than quintupled and added that it expects to outstrip analysts' earnings and revenue targets for fiscal 2001.
The Linthicum, Md., company makes gear that increases the capacity of fiber-optic communications lines. Chief Operating Officer Gary Smith said Ciena doesn't expect to be a victim of an anticipated capital spending slowdown by phone and data carriers, because those carriers continue to buy the newer kind of gear Ciena makes to transmit large amounts of data. 'Well Positioned':
Competitors such as Lucent Technologies Inc. or Nortel Networks Corp. that also make older technology designed to handle phone traffic have seen sales of those products erode amid the slowdown.
Ciena earned $25.8 million, or nine cents a diluted share, on revenue of $287.6 million in the quarter ended Oct. 28. That compares with $4.5 million, or two cents a share, on revenue of $141.4 million in the year-earlier quarter.
As expected, the company took a $19.2 million charge related to a British telecommunications company that defaulted on bills. Ciena also paid $3.8 million in payroll taxes on stock-option exercises. Excluding those items, the company would have earned $41.3 million, or 14 cents. Analysts were expecting 12 cents, according to the First Call/Thomson Financial consensus estimate.
Ciena said it expects fiscal 2001 revenue growth of 75% to 85% and earnings of 67 cents to 70 cents a share, excluding one-time items. Analysts had projected revenue growth of 60% to 65% and earnings of 63 cents a share. Ciena expects earnings for the fiscal first quarter ending Jan. 27 to be a penny above the consensus estimate of 14 cents.
Ciena is making solid progress in expanding into two new areas, optical switching and local fiber-optic systems, said UBS Warburg analyst Nikos Theodosopolous. He said those areas will be vital to the company's momentum over the next year.
"The expansion into these areas was in some ways even more important than the quarter itself," Mr. Theodosopolous said.
The company now has 42 customers after struggling in 1998 with a failed merger with Tellabs Inc. and too much dependence on two major customers, Sprint Corp. and WorldCom Inc. "If WorldCom sneezed, we caught pneumonia," Mr. Smith said.
Ciena's stock rose 25 cents to $95.63 in 4 p.m. Nasdaq Stock Market trading Thursday. |
