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Technology Stocks : Ciena (CIEN) -- Ignore unavailable to you. Want to Upgrade?

To: jghutchison who wrote (9950)	12/8/2000 12:22:23 PM
From: ratan lal	Read Replies (2) \| Respond to of 12623

Did anyone hear the news about IRS chcking 1997 and 1998 taxes of CIEN? I think as more people hear about it CIEN will tank to mid 90's. I am interested in more details before I sell my shares. Anyone?

To: jghutchison who wrote (9950)	12/8/2000 1:02:27 PM
From: Kenneth E. Phillipps	Read Replies (1) \| Respond to of 12623

jgh, another view from a knowledgeable source on Ragingbull NT thread: By: Petabit $$$$ Reply To: 23962 by Bex $$$ Friday, 8 Dec 2000 at 10:19 AM EST Post # of 23985 Bex: lie, damn lies and statistics. Which also happens to be the title of a great book. You can spin market share any way that you want. By dividing the categories, you can be the number one vendor in something. You can get an understanding of this from comparing the product families: Nortel's primary product (MOR) was launched in 1997 and carries 2.5G and 10G traffic over 32 wavelengths. This is what is generating most of the revenue. They introduced the new platform (OPTera LH 1600) in mid 2000, which can carry 40 channels of 10G today (scaling to 160 next year). So I'm very intrigued how NT could get 4% market share of 40 channel systems in 1999, since they didn't have a product then. The number will be very different for 2000. My point is, if you set the 'high-channel count' breakpoint to 40, Ciena will have enormous market share. Set it to 32 and Nortel will win. Nortel will ship a 160 channel next year, Fujitsu have promised a 196 channel system. So I guess Fujitsu will have 100% market share in the above 180 channel systems! The other point made in the article concerns 40G systems. I disagree with the points made in the article, because they are still only looking at the line system. In the future you will have to look at the networks as a whole - it will be too complex to try and manage just the line systems. Which is what the whole Sycamore ODSI v. MPLS v. ASON is all about. I have a lot of respect for Lightreading - under the gossip and spin is a lot of good journalism. Peter Haywood is a smart guy. Everyone has their own agenda, and the article reflects that. P. ragingbull.altavista.com

To: jghutchison who wrote (9950)	12/8/2000 1:40:16 PM
From: cfoe	Respond to of 12623

Notes from Q&A part of Ciena CC. (Long post) Q – Gross margin slippage – outsourcing only cause? Does Metro product affect GM? GTS A/R? A – No pricing pressures affecting GM Metro - no affect on GM; GTS – comfortable w/ financial health; GTS will be concentrating on optical side of system which Ciena sells to; Feel comfortable with A/R, they pay regularly Q – More about GM and capacity issues? A – Are growing in-house capacity; improvements in GFM will come from lower outsourcing costs; high costs in Q4 due to start-up of outsourcing relationships. Core Director (CD) costs not changing GM Service costs were higher due to higher sales; offered anecdote – when they send an installation crew to customer and customer is not ready, the crew waits – they do not pull them back and re-schedule. Ciena eats the cost of the down time. Indication of importance of customer service to Ciena. Q – Deferred revenues increased $8 million in Q4 – reason? A- Awaiting completion of installations; all should be recognized in Q1-01 Q – Competitors seeing now? A- Seeing definite shift away from legacy companies; depends on market, as follows Tellium – Switching NT – Long haul Oni – Metro Q – ILECS shifting? A – They’d (Ciena) would like them to, but it will be a slow process; the ILECS are showing interest in CD. Q – When will CD be 10% of sales? This FY? A – Potential for CD to hit 10% of sales in Q1-01 if deployments are on schedule; Q - What about 10% customers? A – Disclosed in 10K – QWEST, Sprint, and GTS Q – Ultra long haul market size, customer orders? A – Size is about 10% of the overall market; its growing nicely; part of total package; have 2 orders to date – XO is one of them; hard to predict future, but could see 6 to 7 customers. Q-Something about FD interface – I did not understand enough of technical lingo to understand all of the question and answer, but Ciena did say FD interfaces are a significant market opportunity; see hundreds of million (units? Dollars?) even in Q1. (Someone please clarify this!) Q – When will CD be profitable? A – If sales hit 10% mark in Q-1, C will be profitable. Q – Where is Iaxys in the numbers? A - $19.1 million in Provision for Doubtful Accounts for Q4; for year $28 million in PDA with $8.5 mil in Q3. I did not understand where the $9 million they are going to be paid shows up? Help? Q – Any other customers with credit concerns? A – No. (Note DSRs were up slightly due to Iaxys, but within the target range. Q-CD & Metro – number of customers and trials? A – Only report when product is starting out; Metro is now high enough that no longer report this; CD is in four more trials, total customers now 14, with 10 more added in Q4. Metro added 2 customers, but total number not split out. Q – See any sales pricing pressure A – No, pricing is not at top of list [of concerns?] w/ CD and Metro customers Q – Sales trends between chassis and channel cards [hope I have this correct] A – Shipping higher channel count products; Broadwing is customer for top product. Q – Backlog? A – Do not give detail, but orders on hand are equal or greater than Q3 Q - Component pricing and availability? A – Some optical component availability and pricing getting better; prices are decreasing slowly but steadily. Q-CD revenue in 2001 A – Hope to get it above 10% in 2001 Q – [Analyst had none – said all his questions had been answered] Q – Number of companies and efforts in access space? A – Seeing limited customer traction even w/ great technologies; exotic technologies are not necessary [assumed he meant can address needs more simply] Q – Leveraging long haul (LH) customers into Metro? A – QWEST is deploying Metro Q - % of LH customers buying Metro? A - Metro is closing in on 10% of revenue; there is overlap for LH and Metro [meaning former is a lead-in for latter]; LH will also help with selling switches. Q – Any alliances with next generation optical switch vendors? A – Yes, but cannot say any more. Q – Dynergy (buying Iaxys) – ability to sell Metro and CD along with LH? A – Yes – looking to sell all products to them. Comment – Interesting that no one asked if there was any problem with Sprint as a customer. Please make additions or corrections.