excerpted: <<Ciena posts loss, shares up on cost cuts
Reuters
EE Times
(03/05/2009 11:00 AM EST)
Ciena Corp. reported a deeper-than-expected quarterly loss as phone companies held back spending on network equipment, but its shares rose 12 percent on hopes that cost cuts would help the company break even in coming quarters.
The seller of optical switches and other networking products said Thursday it is cutting 200 employees, or 9 percent of its workforce. Ciena will also close its research and development facility in Acton, Massachusetts, over the next four months.
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Ciena said it could not give a revenue forecast for the current quarter due to the volatile business conditions. The company's key customers, including AT&T Inc , and Sprint Nextel Corp, have vowed to rein in spending this year to conserve cash.
Ciena expects to reduce its operating expenses to around $80 million, compared to $84.4 million in the first quarter, and Smith said that would help it break even on earnings, excluding special items, as well as cash flow assuming that revenue and gross margin remain around last quarter's levels.
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Ciena's net loss for its fiscal first quarter ended Jan. 31, was $24.8 million, or 27 cents a share, compared with a profit of $28.8 million, or 28 cents a share, a year earlier.
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Revenue fell 26 percent to $167.4 million. Wall Street had expected revenue of $171.65 million.
Smith said he believes a recovery will be a matter of quarters, not years. While customers were holding back from spending for now, he said, they would likely need to buy more equipment ahead due to increasing Web traffic, as online video and mobile Internet access become more mainstream.
Shares of Ciena rose 60 cents, or 11 percent, to $5.94. (Reporting by Ritsuko Ando; Editing by Steve Orlofsky and Derek Caney)>>
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