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

To: Ibexx who wrote (11854)	2/21/2002 10:23:25 AM
From: Ron Dior	Respond to of 12623

Regarding the company's outlook, Smith said, "There continues to be a high level of uncertainty surrounding service providers' near-term spending. In our ongoing conversations with our customers we continue to receive indications of further deployment delays. We recently received information that leads us to believe that two of our historically most important customers may purchase significantly less from us than they had previously indicated. As a result, we now expect that our fiscal second quarter revenue is likely to be in the neighborhood of $100 million." It would appear that demand is continuing to decline with no end in sight as of yet. The question is how long can companies hold out before folding? I would bet we see a major consolidation this Spring/Summer in these industries. Ron Dior

To: Ibexx who wrote (11854)	2/21/2002 10:54:09 AM
From: chojiro	Respond to of 12623

Ciena posts record loss, sees weak second quarter (Adds analyst comments, background, byline, updates stock action, changes dateline from LINTHICUM, Md.) By Ben Klayman CHICAGO, Feb 21 (Reuters) - Optical networking company Ciena Corp. <CIEN.O> on Thursday posted a record quarterly operating loss because of the spending slowdown in the telecommunications industry and warned results in the current quarter will lag expectations due to further reductions in orders. The company said two of its most important customers, which it did not identify, may purchase "significantly less" than previously indicated. As a result, it now expects second-quarter revenues of about $100 million, below the $148.5 million analysts were expecting, according to Thomson Financial/First Call. The news sent Ciena shares down more than 6 percent. "There continues to be a high level of uncertainty surrounding service providers' near-term spending," Ciena President and Chief Executive Gary Smith said in a statement. "We continue to receive indications of further deployment delays." The Linthicum, Maryland-based company did not provide a forecast beyond the second quarter. One analyst said the second-quarter outlook is particularly worrisome given that Ciena only warned about first-quarter results earlier this month. "Ciena is kind of the canary in the coal mine," CIBC World Markets analyst Rick Schafer said. "They're very symptomatic of the health of the overall (next-generation optical networking) group." He said he expects Ciena to reduce costs further, including cutting a significant number of its 3,300 jobs and possibly closing some plants. LOSS NARROWER THAN FORECAST The company's shares were off 56 cents at $8.14 in morning Nasdaq trade. Ciena, like such telecom suppliers as Lucent Technologies Inc. <LU.N> and Nortel Networks Corp. <NT.N><NT.TO>, has been hit hard by the spending slowdown, including at major customers Qwest Communications International Inc. <Q.N> and Sprint Corp. <FON.N>. Ciena reported an operating loss of $56.7 million, or 17 cents a diluted share, for the first quarter ended Jan. 31, compared with a year-earlier profit of $54.7 million, or 18 cents a share. The loss, which excludes such items as restructuring costs, amortization of intangibles and losses on equity investments, was slightly narrower than the company had forecast because of lower than expected operating expenses. Ciena had warned earlier this month that cutbacks and delays in spending by major customers would result in a wider than expected first-quarter loss of 19 cents to 22 cents a share on revenues of about $160 million. Analysts widened their average loss estimate to 20 cents a share from 11 cents, according to First Call. Ciena's largest previous loss before items was $7.1 million in the fourth quarter of fiscal 1998. It posted a net loss of $1.8 billion in the fourth quarter of fiscal 2001. The first-quarter net loss was $70.6 million, or 22 cents a diluted share, compared with a year-earlier net profit of $53.25 million, or 18 cents a share. First-quarter revenues dropped by more than 50 percent to $162.2 million from about $352 million a year earlier. Ciena said on Monday it plans to buy optical networking firm ONI Systems Corp. <ONIS.O> for $900 million in stock to bolster its presence in metropolitan networking markets. The deal, expected to close in the second or third quarter, would not dilute Ciena's earnings in fiscal 2002 and would add to them in 2003, the company said. ((Ben Klayman, Chicago newsroom, +312 408 8787, benjamin.klayman@reuters.com)) REUTERS * end of story *

To: Ibexx who wrote (11854)	2/23/2002 6:34:31 AM
From: Ibexx	Read Replies (1) \| Respond to of 12623

Qwest Sees Light at End of the Tunnel From Lightreading.com February 22, 2002 Qwest Communications International Inc. (NYSE: Q - message board) held the first of a planned series of weekly conference calls with Wall Street analysts today, apparently hoping to keep them up to date during these rocky times. And the news was mixed. On a positive note, Joseph Nacchio, CEO and chairman of Qwest, said he expects first-quarter cash flow to be between negative $300 million and negative $400 million. On the face of it, that doesn't sound awfully positive, but previous expectations were for a negative $500 million. He expects cash flow to turn positive next quarter. "Based on national indicators, it looks like the rest of the nation is stabilizing. We tend to lag the rest of the nation. Consumer confidence in our region is up -- I'm feeling somewhat good about that," Nacchio said on the call. If Nacchio's right, the good news may have broader implications. “Potentially, this could be good news for the equipment guys,” says Rick Schafer, equities analyst with CIBC World Markets. “Getting back to free cash flow where they are generating revenue is definitely a step in the right direction. The faster [Qwest] can clean up their balance sheet and get healthy, the faster the equipment sector recovers.” A major beneficiary of a Qwest uptick would be Ciena Corp. (Nasdaq: CIEN - message board). Qwest has been one of Ciena’s largest customers over the past several quarters. And in recent months, the company has suffered tremendously as a result of Qwest’s cutbacks (see Qwest Takes Steps ). Indeed, Ciena dropped its expectations twice in the past month in response to cuts from Qwest and other customers such as Sprint Corp. (NYSE: FON - message board). (See Ciena: Outlook Dim and More Cuts at Ciena .) But Schafer warns of a possibly dreary short-term scenario. “If [Qwest's] debt gets downgraded in the next couple of weeks, that could potentially set off a new round of capital spending cuts,” he says. “And in the near term that would definitely be a bad thing for equipment providers.” Qwest’s main problem is that it has way too much debt. Earlier this month, it pulled down $4 billion in bank loans, which the company will use to repay $3.2 billion in short-term, commercial-paper loans. The balance will be used for other cash needs. The fear among investors is that Qwest's debt rating could be downgraded further, hampering its attempts to clean up its balance sheet and get back on track. Currently, the company’s debt is rated as Triple B, which means that it still has two levels to fall before it becomes non-investment-grade. Compare this to other RBOCs such as SBC Communications Inc. (NYSE: SBC - message board), whose debt is rated a Triple A, or Verizon Communications Inc. (NYSE: VZ - message board), with a Single A rating. Still, Qwest is much better off than such telecom companies as Williams Communications Group (NYSE: WCG - message board) and Level 3 Communications Inc. (Nasdaq: LVLT - message board), which have debt ratings in the C range (see Williams Winding Down? and Telecom: The Fear Factor ). Some analysts covering the company say they don’t expect a downgrade to occur. Tavis McCourt, senior telecom analyst with Morgan Keegan & Company Inc. says that as long as the company works toward shedding some of its debt by selling some of its assets it should be fine. “They have control over their destiny,” he says. “They can cut back on capital spending and sell some of their businesses off. If they do get downgraded, it’s because management has taken the stance that it's better not to de-leverage their balance sheet to avoid a debt downgrade. Unless the economy gets much weaker, I don’t see them doing that.” On the call this morning, CFO Robin Szeliga would not give details about the conversations she has had with the company’s lenders over the past week, but she tried to reassure those on the call that the company is doing everything it can to avoid defaulting on loans and avoiding debt downgrades. “We are taking steps to make sure that we don’t bump against any of our convenants,” she said during the Q&A portion of the call. “We are working one-on-one with the banks, and we will work through the changes to our facility. I want to leave with the impression that we are working rigorously on all types of cash management that we had alluded to earlier.” One of the cash management strategies Qwest alluded to is selling off pieces of its business. Nacchio said on the call that he had nothing new to report on that front, but analysts like McCourt speculate that the company could be thinking of selling its directory business, some rural access lines, or its wireless business. But McCourt believes the company will first sell off some of its securities. Shares of Qwest closed down $0.16 (1.90%) to $8.22 today. — Marguerite Reardon, Senior Editor, Light Reading lightreading.com Ibexx