Craig, you are right of course about the ability of great companies to rebound from business adversities. That's what makes them great companies. Some (COMS, INTC come to mind) even get stronger when they have to revise their basic business model.
The thing that makes me cautious with CIEN is that INTC, CSCO and, yes CPQ, had many dozens of important customers, all growing rapidly themselves. CIEN has 90+% of its business from two customers, one of whom is now squeezing them. In fact, I would not be surprised to see WCOM open to testing other suppliers in the near future. They have been over a barrel, with CIEN being the only DWDM supplier for the last year.
I suspect CIEN will see more short term business from them with the MCI acquisition. And AT&T will definitely throw some (maybe up to $60MM) business their way. But unless additional infrastructure suppliers (WMB? QWEST? BT? etc) start to come on line as customers rather quickly, I'm afraid LU and others may change the competitive landscape on them.
Worse, I'm afraid this is what the analysts are expecting. |
