Courtesy Cienisbelievin over on Yahoo...
CIENA Is on a Roll
News of missed earnings from Cisco and of IronBridge closing its doors, as well as panic about reported reductions in capital spending by carriers, makes one want to look for some good news. The bright spot in all this gloom and doom appears to be CIENA. Surviving the scrutiny caused by the inability of iaxis to pay its $28 million bill, CIENA stayed the course and reported respectable fourth-quarter earnings in early December. Then, the company plunked down $2.6 billion to buy Cyras and round out its edge product portfolio. After that, it decided to test the capital markets, and on February 6 completed a secondary stock offering that netted the company $1.52 billion, a full 50% more than the $1 billion that was anticipated. The latest good news from CIENA is a $200 million contract with McLeodUSA, which it won over Nortel, Tellium, and Sycamore. This is a significant win, because the McLeodUSA network is an optical mesh network as opposed to the traditional synchronous optical networks (SONETs) implemented by incumbent carriers. The emerging all-optical mesh network is the target for these competitors, and the ability of CIENA to win in this market is significant going forward.
The Yankee Group believes that the longer-term view taken by CIENA should bode well for its future. However, with growth and size come big company problems. CIENA is no longer a start-up, and as such there will be more scrutiny and more challenges to overcome in order to keep the news good.
yankeegroup.com |
